UK Autumn Statement – November 2022
The UK Autumn Statement – the impact on our industry
The Chancellor delivered the UK Autumn Statement recently, which included a number of policies that directly impact fleet operators and company car drivers.
The announcement on Company Car Taxation levels until 2028 provide the continued support for EV drivers that we’ve been waiting for. We’ve highlighted the three key points from the announcement that will affect our industry and explain the likely impact on fleet operators.
Benefit in Kind (BIK) rates
Clarity on BIK rates was already in place until 2025 and yesterday’s announcements provided additional clarity for a further three years.
The rate for electric and ultra-low emission cars emitting less than 75g/km will increase by one percentage point in 2025-26, an additional 1% in 2026-27 and a further 1% in 2027-28, up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars.
Whilst recognising this is still an increase for drivers and needs to be communicated clearly to both company car and Salary Sacrifice drivers, continued support to maintain the relatively low company car tax burden for those choosing an EV is very welcome.
Rates for all other vehicles bands will be increased by one percentage point for 2025-26, up to a maximum appropriate percentage of 37%, and will then be fixed in 2026-27 and 2027-28.
Vehicle Excise Duty (VED)
From April 2025, electric vehicles will qualify for VED charges just as ICE vehicles do.
Electric vehicles will continue to attract the lowest level of VED for vehicles with CO2 emissions 1 to 50g/km for the first year (currently £10), then followed by subsequent year fees which are currently set at £165 per year. From 2025 this annual standard rate will apply to all zero emission vehicles registered since April 1, 2017. EV passenger cars registered before this date currently in Band A will move to Band B - currently £20 a year.
Luxury car tax
Zero emission vehicles are currently exempt from this Tax - known as ‘The Expensive Car Supplement’. It has however been confirmed that this exemption will end in 2025, and from April 2025 new zero emission vehicles priced over £40,000 (list price) will be eligible to pay the £355 (price as of today) annual supplement which is applicable for the first five years of ownership.
This brings EV’s in line with ICE vehicles and has a significant impact because at the present time over 60%* of EV models are above the current £40,000 list price.
Whilst we welcome the Chancellor’s initiatives to provide stability and the reassurance that net zero motoring is still a priority, and we appreciate the reprieve until 2025 – there is still work to be done across the industry. Athlon UK will continue to work with our customers and prospects to help future-proof fleet policies and ensure that drivers are educated on how these changes affect the cost of running a vehicle. We will especially focus on providing Total cost of Ownership (TCO) analysis taking these new developments into account. This is all part of our regular reviews to ensure that Fleet decision makers are armed with the understanding and knowledge to adjust policies and educate drivers in plenty of time before the changes come into place.
If you would like to talk to Athlon about a TCO analysis of your fleet or to run an EV readiness audit – get in touch using the contact us form.
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