According to Phil Killingley, deputy head of the Office for Low Emission Vehicles (OLEV), the Treasury is poised to announce an update to benefit-in-kind company car tax. For fleet managers, and the employees who use them, this update couldn’t come soon enough.
With rates only published until 2021, there is uncertainty over how WLTP figures will adjust tax for some of the most popular vehicles on the road. The reining company car champion in 2018 was the Ford Fiesta, but the Kia Sportage and Nissan Qashqai made appearances in the top 10 – solidifying the rise of Crossover SUV’s. 20 per cent BiK for a one litre Fiesta will cost the employee £72 per month, while a run-of-the-mill Qashqai will carry a monthly cost of £118. Under WLTP sums, most new vehicles saw a 20% increase in CO2 emissions compared to NEDC figures. This has penalised otherwise affordable vehicles and forced the hand of consumer and corporate.
With fully-electric, hybrids and low-emission combustion engines now readily available and sweeping through the fleet market, the tax rate adjustments should make these vehicles more financially viable.
Demand for BEV and PHEV cars have risen consistently over the last several years; the Tesla Model 3 made the most notable strides across the Channel, where it outsold all saloon alternatives in March 2019. Manufacturers from every corner of the globe are pushing the electric agenda, with the Mercedes EQC and Audi e-tron receiving critic acclaim.
The impending announcement will undoubtedly make for good environmental news and is a step in the right direction for low emission vehicle uptake, however, the feasibility of using an electric vehicle for daily business use is still a problem for some. Whether based in fact or fiction is another story.
The UK has seen a five-fold increase in charging points since 2011, with a total of 13,000 public charging points, and businesses too have made use of the charger grant to install infrastructure at offices. Should businesses take this ‘perk’ one step further and subsidise ultra-low-emission vehicles, whether company-owned or not?
For urban commuters, the introduction of ULEZ in London saw 28 per cent of drivers change vehicles to comply, and other cities across the UK are looking to develop Clean Air Zones in accordance with government targets. The positives for low-emission vehicles are certainly starting to outway the downsides, but with other countries making greater strides towards a fully low-emission national fleet, this could provide evidence that an acceleration will require considered buy-in and investment from both the public and private sector.