Budget 2015: Company Car BIK Rate Changes
The Chancellor announced in his 2015 Budget speech that, from 6 April 2019, the company car benefit in kind (BIK) rate will increase by 3 percentage points across all CO2 emission bands. That now includes Ultra Low Emission Vehicles under 75g of CO2/km.
As with previous years' announcements, the 2019/20 company car BIK rate will be capped at 37%.
Company Car BIK Rates Table
(If you're looking for 2016 rates we also have the BIK rate updates announced in 2016 available for viewing and download.)
What BIK means for businesses
2019 rate increases may seem like a long way off but it's the latest in a long line of increases for company car BIK rates so watch out because if you're not looking ahead, your company car scheme vehicles could look somewhat undesirable.
Apart from a small and brief decrease of 1 percentage point for diesel drivers in 2016/17 when the 3% diesel supplement is abolished, all other company car BIK rates are increasing between 2-4 percentage points each year (capped at 37%).
So, if you offer your drivers a petrol car with 111g of CO2 emissions per km in 2015 for example, over a three year leasing term their BIK taxable percentage will have increased by 4 percentage points. That's not inconsequential. It's also worth noting that although Ultra Low Emission Vehicles are the lowest on the rate table, their BIK rates are on an even steeper incline.
Automotive technologies are constantly evolving and alternative fuel vehicles will be growing ferociously in number and versatility, by 2020 we could even see BIK subsidies on these like we already have on vehicle tax (VED).
Fleet professionals know that there is a delicate balance to be struck between choosing a vehicle that has low day-to-day running costs but also meets your business needs and your drivers' expectations. There is no hard and fast formula. It's a creative skill that we've developed over the years for our customers who each demand different qualities from their fleet cars and vans.
If you want to learn more about managing an economical and popular company car scheme, drop your details in our contact form and we'll buzz you back.
Company Car BIK Rates Timeline
Want a summary of the 2015 BIK rate changes in bite-size pieces? You got it. Here is a year-by-year company car BIK breakdown:
2015 Vehicle Tax
Check the UK vehicle tax rates for 2015/16