For a government that flies the flag of green, economical transport with low emissions, the budget last week was to say the least embarrassing. Having badgered the motor industry into ever lower emissions and better economies, resulting in expensively developed hybrid and electric cars, they then go ahead and charge BIK on near zero emission cars. As an advocate of Eco Cars, with years of support for Eco lease cars, we are at Carlease UK, disappointed
For starters, the 2% annual rise in company car BIK will carry on to include years 2017 & 2018. Ridiculously, a car that emits as low as 76 g//km co2, will be in the 19% bracket by 2018. The detailed budget notes state that the increase in revenue from Bik with be £240m in 2017 and £460m in 2018. For a car like the i3 BMW, this should not be the case.
The government has delivered a swift kick to any drivers in electric cars, by taking a vehicle that emits less than 51g/km CO2 into the 13% bracket. This represents the single biggest change in taxation and the biggest percentage increase in cost for a company car driver. It will call into question the sense in buying of very expensive electric cars when an efficient diesel pays just a little more BIK
These changes will greatly affect the plans of companies considering electric or hybrid cars. Going from zero to 13% BIK in one go is a massive change and surely not an expected one. With changes to small, efficient diesels being in low single figures, the government may well have shot its LEV campaign in the foot.