ICFM comment from chairman Paul Hollick on Government’s company car benefit-in-kind tax rates announcement

Posted On : 16th Jul, 2019

“ICFM is relieved that the Government has taken at least some action to limit company car drivers’ exposure to higher benefit-in-kind tax bills as a result of increased carbon dioxide (CO2) emissions figures under WLTP testing when compared to NEDC testing.

“We had feared that the status quo would remain and thus the impact of higher CO2 emissions averaging 20-25% under WLTP would be ignored. So, this is welcome news although we were should really expect more.

“While the Government has slightly incentivised the take-up of zero emission models it has failed to take account of the lack of availability of those vehicles in today’s marketplace.

“For fleets and company car drivers to truly embrace the plug-in vehicle revolution, the Government needed to take account in reviewing tax rates of model launches and availability. Plug-in vehicles – and particularly zero emission models – remain a very niche product and what availability there is does not meet fleet and company car driver requirements in the majority of cases.

“That will change over the next two or three years as more models from mainstream manufacturers become available. Therefore, the Government needed to incentive the take-up of zero emission and plug-in vehicles through the benefit-in-kind tax regime over a much longer period of time as by April 2022 tax rates will be back to where they were at April 2020.

“The migration of employees out of company cars is well established as identified by HM Revenue and Customs’ data going back over many years.

“ICFM fears that the Government has not done enough in reviewing company car benefit-in-kind tax to either stop, slow down or reverse that trend.

“As a result, through its own company car benefit-in-kind tax strategy it is undermining one of its major policies – driving fleets towards a zero emission future.”


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