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BVRLA calls for plug-in BIK budget announcement

Date: 09 October 2018   |   Author: Sean Keywood

A cut in company car BIK rates for electric vehicles (EVs) should be brought forward by the government in this month's budget, according to the British Vehicle Rental and Leasing Association (BVRLA).

Under current plans, the rate for vehicles with the lowest emissions will rise to 16% in April 2019, before dropping to 2% a year later.

The BVRLA argues that by bringing the cut forward the government could provide a stimulus to the EV market, which is currently growing at less than 4% a year.

Chief executive Gerry Keaney said: "We welcomed the Road to Zero strategy and our industry responded by issuing its own Plug-in-Pledge, which would see its electric and plug-in hybrid fleets grow to 720,000 by 2025.

"The majority of these vehicles will be company cars and businesses can only deliver this huge move to zero-emission if they have an enabling tax environment. Taxing electric cars at 16% is madness."

The BVRLA has also called for the government to support the use of low-emission petrol and diesel company cars, arguing that EVs are not yet appropriate for all trips, and the average company car emits 11% less CO2 than the average personal lease car and 19% less than the average grey fleet car.

It says the government must also address the introduction of the new WLTP emissions standard, which it warns could see some BIK rates rise significantly.

Keaney said: "The tax burden on company car drivers has already risen by £1bn over the last five years.

"HMRC's most recent estimates show a continued fall in the number of company car drivers.

"More than half of company car drivers say that their vehicle is an essential tool of the job - not having one isn't an option."

Keaney said large numbers of people who used to have a company car as a perk or employee benefit are now opting out because of rising tax costs.

He continued: "They are taking cash instead and the evidence suggests that they are spending this on older and more polluting vehicles.

"It is vitally important that the chancellor seizes this tremendous opportunity to support the future of the company car by using this month's Budget to rein in these unhelpful tax hikes." 

The BVRLA has also called for the government to freeze company car tax rates at 2018/19 levels, and publish a four to five year view of future tax bands.