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Budget 2015: Chancellor confirms 3% BIK rise for 2019/20
Date: 18 March 2015 | Author:
Company car drivers are facing a larger benefit-in-kind jump in the 2019/20 tax year, after the chancellor used his 2015 Budget to announce a 3% rise for all but the lowest-emission vehicles.
The chancellor's figures show that the increase will cost company car drivers an additional £340m in tax.
Having endured annual 2% rises from 2014/15 through to 2018/19, rather than the previously traditional 1%, the rise will be an eye-watering 3%, meaning drivers of cars between 76-94g/km, the lowest conventionally fuelled vehicles can currently achieve, will pay a benefit-in-kind rate of 22%, compared to their current level of 11%.
In a slight change from previously announced policy, the chancellor claimed in his speech that to "encourage a new generation of low emission vehicles", the Government would "increase their company car tax more slowly than previously planned, while increasing other rates by 3% in 2019-20." Though the rates will increase in line with regular vehicles, this is different to what was announced last year when the gap from 51-75g/km and 76-94g/km bands, and sub-51g/km and 51-74g/km was supposed to close from 3% to 2% in 2018/19, when this will now remain at 3% until at least April 2020.
Despite this claim, the BIK bands for low-emission vehicles appear to be rising in line with all other bands, with 0-50g/km cars taxed at 16% BIK for 2019, and 51-75g/km vehicles at 19%.
The changes mean the top band, which remains 37%, will account for all cars over 164g/km from April 2019.
