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BIK tax and the reduction of tax paying company car drivers

You are probably aware figures recently published by HMRC revealed a decline of 70,000 employees paying benefit in kind tax in the UK for a company car in the 2017-18 tax year. (890,000 vs. 960,000 in 2015-16). HMRC attributed the decline to the introduction of ‘voluntary payrolling’ in April 2016. However, HMRC’s own figures show that the average benefit charge per driver was £5,390 in 2017-18, compared to £4,150 in 2014-15. This represents a 30% tax rise for any driver who took on a four-year lease car in 2014-15. In total, the taxable value of company cars reached £4.8 billion in 2017-18 an increase of £1 billion vs. 2008-09 (shared between 1,010,000 drivers). Whilst the truth for the recent decline will not be known for another 12 months, when a further change to tax rules will require employers to report their details through PAYE returns. The message is clear – fewer drivers are paying significantly more tax. To find out the predictions from the Fleet250 email benjamin@fleet250.co.uk (supply chain) or penny@fleet250.co.uk (fleet operators).

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