Tusker, the car benefit people, has welcomed the Government’s Response to the Review of WLTP and Vehicle Taxes, which will result in a revision of the Benefit in Kind rates for company cars. The scheme, which enables drivers to exchange some of their salary for a brand new, all-inclusive car, has now become even more affordable, particularly for electric vehicles.
The previous Government plans went some way to incentivise the uptake of Ultra-Low Emission Vehicles with the lowest tax rates dropping to just 2% for the most carbon efficient cars which can travel more than 130 miles via electricity.
Within the response, long-awaited clarity has been provided for fleets and organisations who provide salary sacrifice Car Benefit Schemes of the impact of company car tax up now up until 2023.
For most vehicles registered after April 6th 2020, tax rates have been reduced by 2%, with zero-emission models now tax-free in 2020-21, only rising 1% each year until 2023. With the Car Benefit Scheme taken from an employee’s salary before tax and National Insurance, this could provide an even bigger saving for thousands of people.
The new BIK rates, coupled with the news this week that the Department for Transport has committed to spending £37 million on improving the UK’s electric vehicle charge point infrastructure, means that Electric Vehicles (EVs) are more accessible than ever before.
In real terms for 2020-21, an individual earning £30,000 a year already driving a petrol VW Golf (1.5l) company car in 2020-2021 would incur £116 per month in BIK tax. In the same tax year, the tax for an all-electric Golf drops to £0.
Over the course of a three-year period, someone on an annual salary of £30,000 could save almost £4,000 in BIK by driving a zero-emission vehicle. When taken under a salary sacrifice arrangement, they could also benefit from an overall tax efficiency of around £6,000. And that’s without factoring in the average Tusker ULEV driver’s fuel saving of a massive £750 per year*.
It’s attractive for employers too, as NI savings can be made on ULEVs, so there are savings of over half a million pounds available for some employers.
With a growing range of Electric Vehicles on the Car Benefit Scheme, ranging from the Nissan Leaf to the Tesla Model 3, there are more cars available than ever before, featuring the very latest in car technology. From electric only models to Plug-in Hybrids for those who still need a conventional engine, there is something to suit everyone.
Paul Gilshan, CEO at Tusker, comments, “The Government have sped up and shown real commitment on the road to zero emissions. This announcement will really encourage drivers into the cleanest vehicles helping to meet carbon reduction targets. And with so many other benefits and additional savings the best way to drive Electric really is with Tusker’s Car Benefit Scheme.”
Tusker’s Car Benefit Scheme provides a brand new car, complete with insurance, road tax, breakdown cover, tyres, servicing and maintenance, for a fixed monthly amount. As the amount is taken from salaries before tax and National Insurance, Ultra-Low Emitting Vehicles will provide fantastic savings for drivers.
*approximately. Based on driving 10,000 miles per year.