15 August 2022
More and more companies are joining the call for clarity on the future of BIK rates
The British Vehicle Rental and Leasing Association (BVLRA) launched a campaign last month to lobby the government into keeping Benefit in Kind (BIK) rates low for electric company vehicles once the current rates expire in 2025.
The latest company to join the cause is Volkswagen Financial Services Fleet, which has backed the campaign to maintain low tax rates for zero-emissions vehicles after 2025, after 83% of fleet operators have revealed that uncertainty over tax rates could impact the rate at which EV’s are bought by their drivers.
With the current 2025 deadline on low BIK not having been extended by the government, and with the sudden withdrawal of Government grants for EVs in June this year, many fleet drivers are beginning to worry that they are fast approaching their vehicle renewal orders, but with little to no visibility on what the tax implications may be of their next vehicle choice.
VWFS have commented that the low tax rates over the last couple of years has proved a huge incentive to drivers to swap to zero emissions vehicles. The transition to EVs is a major component in the UK Government’s target date of 2030 for the end of new internal combustion engine sales, and without the financial incentive of lower vehicle tax for EVs to encourage early adoption, this target may not be met.
As the BVLRA’s campaign continues to grow in strength among the UK’s fleets, it is hoped that the Government may soon offer an indication of future tax rates, which will hopefully add confidence to those considering an EV as their next company vehicle.