MY apologies, this is all a bit boring, but it is important.
“He” in the title is Chancellor of the Exchequer George Osborne. What has he done again? He has hammered the company car driver in his July Budget, the first of the new Conservative government.
In 2014 George (should I call him George?) started to increase the benefit in kind (BIK) charge on a company car by two per cent per annum rather than the previous one per cent.
MY apologies, this is all a bit boring, but it is important.
“He” in the title is Chancellor of the Exchequer George Osborne. What has he done again? He has hammered the company car driver in his July Budget, the first of the new Conservative government.
In 2014 George (should I call him George?) started to increase the benefit in kind (BIK) charge on a company car by two per cent per annum rather than the previous one per cent. He obviously feels that the company car driver needs to contribute even more to the national deficit recovery because from 2019 – 20 tax year this will go up by three per cent per annum, and I quote: “From 2019-2010 the appropriate percentage of the vehicle’s list price (subject to tax) will increase by three percentage points for cars with CO2 emissions above 75 gm/km, up to a maximum of 37 per cent.”
This will have an impact on the choice you make for your next company car as if you choose a car with a higher CO2 output your personal tax liability will increase dramatically over the period of your contract, for example:
A popular fleet car like the Mercedes C220d Sport manual saloon has a list price of £33,653 and a CO2 of 103. If you took delivery of that car on a 48-month contract in the next few months then you would still be driving it in the tax year 2019/20, and your personal liability would increase by 13 per cent from a monthly £247 to £280 if you were a 40 per cent tax payer.
See what I mean?
However we still think that driving a company car is cost effective when compared to the cost of doing so personally, ask us for some examples to confirm. So if you are due to change your company car then it is more important than ever to be aware of the CO2 output and list price implications of your choice as it has a real impact on your take home pay.
To get some advice and help with the calculations then talk to us at Alpha Contract Leasing. We have online tools that will guide you through the process and help you make an informed decision. Of course we would also welcome the opportunity to supply your next vehicle as well. Talk to the team on 01604 756620.