Paul Barker's blog: 17 April 2014 - Surprisingly meek acceptance of punishing BIK changes
17 April 2014
Paul Barker is Editor of BusinessCar
Now that the dust has settled following the 2014 Budget, it's surprising to see how most of the industry responded to the benefit-in-kind changes in particular, with a surprising lack of voices standing up for fleet drivers and operators facing steep rises in BIK and National Insurance payments.
You would have thought more people would have something to say about what seems to be a coordinated targeting of the fleet sector after George Osborne set out further two percentage point rises per year for mainstream vehicles in the 2017 and 2018 tax years, having previously announced the same from 2015. Prior to that, one percentage point increases were the norm, but now the lowest rate a driver will be paying, unless they have a car below 75g/km, is 19%.
Last month it was 10%.
As I wrote in the previous issue, as the impacts of the Budget were still being assessed, my problem is that the bands haven't given drivers anywhere to go, unless they are in the minority that are willing and able to move into a plug-in vehicle of some description, while the BIK advantages of those are being deliberately eroded over the coming years despite the sector being far from established.
If the BIK bands are continuing to rise, then establishing a 90g/km or 85g/km band would have at least given cash-conscious drivers somewhere to go, as well as giving manufacturers something to aim for.
This is basically a shift in policy, and a sign that the Government is now focussed mainly on topping up Treasury revenues, and that encouraging business drivers to pioneer the take-up of low-emission vehicles is very much pushed to one side.