ACFO has reacted angrily to the Budget, branding it a “waste of a golden opportunity” for the chancellor to help shape long-term fleet decisions.
In particular, the trade association said it was disappointed the Budget did not contain details of company car Benefit-in-Kind rates beyond 2020/21.
The Government said the impact of WLTP changes on company car benefit-in-kind and vehicle excise duty rates will be reviewed, with a report due in the spring. That means the BIK rates are currently only set until the end of the 2020/21 tax year, meaning drivers taking a company car at that point will have just over 24 months of visibility about what will be happening with their tax bills.
ACFO said this is not good enough: “Introduction of the WLTP for homologating vehicle emission and MPG data, the basis for the new regime, post 2020, has been in the pipeline for some time and the fleet industry had been led to believe that WLTP-based rates for 2021/22 and beyond would be announced in the 2018 Budget,” said its chairman, John Pryor. “Historically, the Chancellor has announced company car benefit-in-kind tax rates for up to four years in advance. The Chancellor’s failure to make announcement and provide clarity to fleet decision-makers and company car drivers will, ACFO fears, further driver employees to opt for a cash alternative instead of a company car.”
Pryor also questioned the Government’s commitment to increase the uptake of electric vehicles after the chancellor failed to bring forward the introduction of lower Benefit-in-Kind rates for electric vehicles in order to stimulate the take-up of EVs, despite campaigning from the industry and prominent MPs and Peers.
“As a whole ACFO questions what has happened to the government’s ‘green’ agenda. Recently the government cut the Plug-In Car Grant and in the Budget it has failed to answer our call for a U-turn on the decision to increase to 16% benefit-in-kind tax on cars with emissions of 50g/km or below in 2019/20 and bring forward the already announced reduced rates, including the 2% threshold for 100% electric models and those with an electric mileage range of up to 130 miles, to April next year from 2020/21,” he said. “Those twin decisions will, ACFO believe, only serve to dampen fleets’ enthusiasm for ultra-low and zero emission cars, at least in the short term, at a time when the government says it wants to drive out petrol and diesel engined vehicles from the UK car parc.”