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Paul Barker's blog: 2 October 2012 - Poor Budget decision bites back

Date: 02 October 2012   |   Author:

Paul Barker is editor of BusinessCar

When the 2012 Budget back in the spring contained the hidden surprise of ultra-low emission vehicles losing their Benefit-in-Kind tax advantage, it seemed like an odd decision.

The 2015 jump from 5% to 13% BIK is a hefty one, with a 40% tax-paying driver with an Ampera Positiv seeing their monthly BIK bills go from £62 a month to £161.

That has the potential to completely undermine the whole electric and range-extender market, and the volumes involved really won't bring in enough revenue to make it worth the very real risk of destroying a new and much-needed technology that will help cut emissions and help the Government meet its targets.

I have a suspicion that this is an example of the Treasury not realising the can of worms it is opening, as was the case with the pasty tax and caravan tax.

Hopefully, the chancellor has left himself enough wiggle room to rectify the situation, either in the rather late autumn statement on 5 December, or in next year's spring Budget.

Either way, it's something that needs addressing because these important cars will still need to be incentivised until they are cost-neutral to buy and the driver then makes up an advantage on fuel spend, which is unlikely to happen in the next couple of years.

Congratulations to our own Jack Carfrae, who, we're proud to say, has won the Headline Auto Rising Star of the Year (Business) award.

It's the third Headline Auto award collected by BusinessCar, and the magazine also placed third in the 2012 Business Publication of the Year category.

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