17 April 2015

The Budget and BIK

In last month's budget the Chancellor announced significant increases to the amount a driver will pay in Benefit in Kind (BIK) tax by the year 2018–2019.

Here are three tips to what you should consider in the future for your long-term leases.

1. The percentage of list price on which tax is paid in the later years makes it more important than ever to manage your company car list, to ensure it includes the lowest CO2 options.

2. Companies should be considering how the increase to BIK tax will affect the monthly cost in a 4-year lease to a 3-year lease. To avoid increased National Insurance costs to your company, and higher tax bills for the employee, it might be time for companies that operate 4-year leases to consider reducing them to 3-year terms. 

3. Manufacturers will be competing to supply cleaner, more economically friendly cars so it makes sense to take advantage of significant launches, as and when they happen. A shorter lease means earlier access to the latest and cleanest technology, therefore managing future costs as much as possible.

If you would like to know more about the on-going management of your fleet list for long term efficiency and cost effectiveness, please contact us on 01908 288400 or speak to your Area Manager.