An announcement of extended company car BIK tax tables should be one of the first items of business for the next UK Government with regard to the fleet industry, according to the Association of Fleet Professionals (AFP).
The organisation said that, with the current tables only running to the 2027/28 tax year, fleets buying vehicles today did not know the rates their drivers would be charged towards the end of the decade.
AFP chair Paul Hollick said: “There’s been something of a structural change in recent years, with the popularity of electric company cars on fleets meaning businesses have started operating longer replacement cycles to help offset their higher purchase cost, rising from typically three years to four or five.
“This means that we need the BIK tables to extend longer into the future than was previously the norm.
“Our AFP Tax and Regulation Manifesto launched last week and one of its key demands is to see company car tax settled at least until the 2029-30 tax year. Clear, positive signalling is needed from the government to instil confidence for fleets buying future vehicles.
“In our view, this should be among the first fleet jobs for the incoming government, whoever that turns out to be, otherwise fleets are buying ‘blind’ without being able to tell drivers what BIK tax they will be paying in the future. That’s simply unfair.
“After a General Election, the Chancellor will normally create a Budget or fiscal statement within the first couple of months, and we’d very much like to see the new tables announced at that point. It’s an easy task and would create a much higher degree of certainty.”
Hollick added that, while the AFP broadly accepted that BIK rates on electric company cars would increase over time as they became widespread on fleets, it was important to maintain an incremental approach.
He said: “BIK taxation on electric company cars has been rising at about 1% every year and we believe that increases higher than this could easily prove counterproductive.
“While electric power has become almost the norm for many operators, it is largely the low hanging fruit that has been picked and we’re entering a more difficult phase.
“We’re now working our way through these trickier applications, notably where drivers don’t have charging available at their home or nearby, something that won’t be resolved properly until on-street charging infrastructure becomes widespread across the country. For these employees, low benefit in kind taxation is an important incentive to offset inconvenience.”
