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Call for end to 3% BIK surcharge

Date: 14 December 2011   |   Author:

ACFO has called on the Government to remove the "totally unjustified" 3% benefit-in-kind surcharge for diesels.

The association made the demands in a recent meeting with HM Treasury and HMRC officials, with ACFO chairman Julie Jenner saying that there are "no valid reasons" for the 3% supplement.

"It was introduced almost a decade ago for reasons that no longer exist," said Jenner. "The tax system must reflect today's vehicle technology and be fair and neutral irrespective of powertrain type." She predicted more drivers could switch back to rapidly improving petrol engines if the surcharge isn't removed.

The 3% on diesel models was introduced with the new CO2-based company car tax regime in 2002.

Jenner also called on the Government to introduce five-year notice periods for changes to the BIK thresholds. Having been at three years under the previous Government, notification of the future rates has dropped to two years in advance, with nothing confirmed beyond the end of the 2013-14 tax year at present.