The months of uncertainty felt by the fleet industry are set to end on March 11 which has been announced as the date which the first Budget since the general election will be released. The delay in the implementation of this legislation created further trepidation in the Fleet industry and meant that fleet decision makers and company car drivers were uncertain about upcoming tax liabilities for future years.
In this Budget, it is expected that Chancellor Sajid Javid will adopt the new BIK tax rates, published in July 2019, into law. With the passage of the Finance Law through parliament expected to be delayed until after April 6, when the new rates are expected to become effective, legislation will allow them to be backdated.
Initially, legislation was expected to be introduced in the Finance Bill set to follow the Autumn Budget in 2019. However, this plan fell through when the Government lost its working majority in the House of commons and struggled to push through its Brexit Deal, therefore cancelling the planned Budget on November 6th.
The HM Treasury published the responses in July 2019, which resulted in the previous BIK rates for 2020/21 being changed and two new BIK tables for company car drivers being released.
Unveiled was a table for those driving a company car registered after April 6, 2020 and one for people driving a company car registered before the same date. For cars first registered from April 6, 2020, most company car tax rates were due to be reduced by two percentage points, with a new zero percentage rate for pure electric vehicles (EVs).The zero percentage rate was also extended to EVs registered prior to April 6, 2020, leading them to anticipate a much reduced rate of 2% for 2020/21.
After the publication of BIK tables for the years running to 2023, HM Treasury said that rates would be ‘realigned’ after this date.
Overall, the new Budget is set to deliver change across the country, help deliver world-class public services, and unleash Britain’s potential.
Speaking at the £350 million Trafford Park tram line project event in Manchester, the Chancellor said: “People across the country have told us that they want change. We’ve listened and will now deliver. With this Budget we will unleash Britain’s potential – uniting our great country, opening a new chapter for our economy and ushering in a decade of renewal.”