[Grant Thomas]

The budget 2014 has done nothing to encourage Company Car Tax to drivers to select an Ultra Low car like a Nissan LEAF or BMW i3. I've had my calculator out; here are the numbers in their full horror; order a Nissan LEAF Tekna today on a 4 year lease and you'll jump from paying £0 this year to £1,609.92 a year by 2017 in company car tax. Just WOW.

Due to the continued short sighted view from the treasury this will make ALL cars emitting under 50 Co2 be in the same 13% Company Car Tax band by 2018. Ouch Ouch Ouch

On a personal level this may impact my next car choice when my car is up in August 2015 as the compelling business case just significantly eroded.

 

[Paul]

Never had a company car, so can't really feel your pain... But yes that seems a regressive step if they really want very low emissions vehicle take up to increase?

 

[Grant Thomas]

50% of all new car sales are to fleets; without a compelling case to choose an EV why bother, could be the message from this Company Car Tax strategy

 

[Matt Beard]

You might as well go for an Ampera or a Plug-in Prius - they are in the same band!

 

[PMC Paul]

How long did you think HMRC was going to continue not collecting TAX from EVs?

Now combine this with the news from the other thread about per kWh billing, and we are quite happily plodding down the route towards a per kWh tax. And eventually, once there is a significant uptake, VED will be updated to count for the number of seats or wheels or something regardless of engine or fuel type.

 

[Grant Thomas]

I've had my calculator out; here are the numbers in there full horror; order a Nissan LEAF Tekna today on a 4 year lease and you'll jump from £0 this year to £1,609.92 in company car tax. Just WOW.

 

[Paul_Moxhay]

I think that all this has to happen at some point doesn't it? The question for me is this: Is it too early?

I think it probably is and will remain so for some years to come. The full car tax doesn't come in until 2018-19 so hopefully by that time the incentives won't be quite so necessary.

 

[Geoff]

No increase in fuel duty will not help promote an increase in EV ownership either.

 

[Grant Thomas]

ermmm.....London Air Quality....about to be fined by Europe for breach of safe levels....sorry sorry... i"m joined up thinking again

 

[planetf1]

Of course taxes and charging will have to apply long term -- but right now in theory I thought the government was trying to encourage the use of alternative fuels, more efficient transportation etc - witness the investment through olev for example. Yet as grant says a large % of car sales are through fleets - and leases apply for 3-4 years typically, so by introducing these higher rates now there is a real likelihood they are strangling any potential demand for EVs by making them no more cost effective than the alternatives.

As grant says this completely throws a spanner in my calculations post 2015 too.

Anyone got 100k free so I can go and buy a tesla outright. Yes I'm hooked on EVs but this is going to be very very tricky.

Fundamentally I think the government are screwing up the policies here -- I don't think things are properly linked together and there isn't enough focus on tackling the real issues of climate change.

 

[hopbackguy]

But if you're going for a company car, isn't the EV still the lowest cost option? All other cars are going up too.. Or are you saying you'd consider taking cash instead of a lease and buying ? Sorry I'm probably being dim tonight, big glass of red with dinner!

 

[Grant Thomas]

But if you're going for a company car, isn't the EV still the lowest cost option? All other cars are going up too.. Or are you saying you'd consider taking cash instead of a lease and buying ? Sorry I'm probably being dim tonight, big glass of red with dinner!

There's only a 2% difference by 2019/20 between EVs and the next ICE band, so no difference buying a £20k VW Golf vs £30k LEAF or BMW i3, in fact the Golf lease is cheaper and company car tax the same. The £5k give grant does not apply to company car tax. So the only saving is the fuel cost for the range sacrifice

 

[Julian Hasinski]

I went from leasing a land rover discovery to an ampera as my company car and it was like getting an extra salary! Which was the intention as I hadn't had a salary increase since 2008 and my wife was pregnant with number 4. If you get a chance to have a company car the lowest tax bik bands make it way cheaper than earning the cash. Our scheme is a salary sacrifice scheme through tuskerdirect.co.uk. You can ask to see their rates and then ask your employer if you can take part. The financial examples show neatly how the lowest tax bands work in your favour.

 

[hopbackguy]

There's only a 2% difference by 2019/20 between EVs and the next ICE band, so no difference buying a £20k VW Golf vs £30k LEAF or BMW i3, in fact the Golf lease is cheaper and company car tax the same. The £5k give grant does not apply to company car tax. So the only saving is the fuel cost for the range sacrifice

Oh yes, of course. Barmy. Government are very good at non joined up thinking aren't they? Treasury policy working totally against another stated objective.

 

[Gary Taylor]

But if you're going for a company car, isn't the EV still the lowest cost option? All other cars are going up too.. Or are you saying you'd consider taking cash instead of a lease and buying ? Sorry I'm probably being dim tonight, big glass of red with dinner!

One of the options open to me is a very dirty pick up, dirty as in over 200 co2 compared to my Ampera of 27 co2, as a company "van" the current all in yearly tax rate is £1200 for the van and £200 for the fuel. For the Ampera current yearly rate is @£800 for the car and @£400 fuel. Therefore my very clean but expensive environmentally car is more tax efficient than a van for my personal tax bill and better for the world and my grandchildren.

However come 2018 just for the Ampera (at current P11d value of £40,000) the tax bill will be £2,080 not sure of the fuel rate but would probably be pushing £1,000.

Obviously in the examples above I don't have the 2018 van rates but they have not moved much in the past few years, also price cuts for the Ampera would need to be factored in, and you never know the tax rates on white van man may double, who knows.

Hence in 2018 the yearly tax bill for my very clean car will be around £3000, making it @£100 pound a month more actual tax than a very dirty Hilux, Navara etc.

So being totally selfish and at the end of the day why would I want to pay an ever increasing tax premium to drive an environmentally friendly vehicle, when I can drive a tank for less at 22mpg.

Not impressed, and mildly tipsy, please excuse me if it rambles a bit.

Gary

 

[Grant Thomas]

I went from leasing a land rover discovery to an ampera as my company car and it was like getting an extra salary! Which was the intention as I hadn't had a salary increase since 2008 and my wife was pregnant with number 4. If you get a chance to have a company car the lowest tax bik bands make it way cheaper than earning the cash. Our scheme is a salary sacrifice scheme through tuskerdirect.co.uk. You can ask to see their rates and then ask your employer if you can take part. The financial examples show neatly how the lowest tax bands work in your favour.

If these rate remain I would probably buy a £15k nearly new Nissan LEAF Tekna as the reduction in the BIK tax cash amount would be compensated for by not having to pay £1,600 company car tax.

 

[Grant Thomas]

So being totally selfish and at the end of the day why would I want to pay an ever increasing tax premium to drive an environmentally friendly vehicle, when I can drive a tank for less at 22mpg.
Gary

Well all other ICE cars will be at least 2% higher and will cost more; but the margin of difference is much smaller so some may just not make the switch to Electric Cars.

 

[hopbackguy]

One of the options open to me is a very dirty pick up, dirty as in over 200 co2 compared to my Ampera of 27 co2, as a company "van" the current all in yearly tax rate is £1200 for the van and £200 for the fuel. For the Ampera current yearly rate is @£800 for the car and @£400 fuel. Therefore my very clean but expensive environmentally car is more tax efficient than a van for my personal tax bill and better for the world and my grandchildren.

However come 2018 just for the Ampera (at current P11d value of £40,000) the tax bill will be £2,080 not sure of the fuel rate but would probably be pushing £1,000.

Obviously in the examples above I don't have the 2018 van rates but they have not moved much in the past few years, also price cuts for the Ampera would need to be factored in, and you never know the tax rates on white van man may double, who knows.

Hence in 2018 the yearly tax bill for my very clean car will be around £3000, making it @£100 pound a month more actual tax than a very dirty Hilux, Navara etc.

So being totally selfish and at the end of the day why would I want to pay an ever increasing tax premium to drive an environmentally friendly vehicle, when I can drive a tank for less at 22mpg.

Not impressed, and mildly tipsy, please excuse me if it rambles a bit.

Gary

How can the fuel cost for the Ampera be twice as much as the fuel for the van in your figures above Gary?

 

[Gary Taylor]

Sorry, the figures are for the taxable rate for private fuel of a company car, for a car the tax is based on a figure set by HMRC for this year it is £21,100 you multiply this by your co2 value for the Ampera 5% then by your tax rate which for me is 40% = £422.
The fuel tax for a van is a fixed rate, for this year £564 and is not affected by co2 hence at 40% tax I would pay £235.
I knew it wasn't a good idea to be venting at 11:30 pm after a few drinks
Gary

 

[Mark]

Grant's table is very helpful, I went from a 7 seat Ford into a Nissan Leaf Acenta. Most of my work colleagues thought i was mad but like Julian mentions the money saved was like a pay rise. I didn't expect it to go on forever but i would have hoped the increases would be a little less harsh. For me, my initial decision to move to electric wasn't all based on finances as i really enjoy driving them and I don't need to do many long journeys. I'm trying to be sensible and for the next few years topping up my pension payments.