No BIK in 2020/21 for Electric Cars
BiK, otherwise known as company car tax, can be expensive as many drivers know, but following the introduction the the WLTP (Worldwide Harmonised Light Vehicle Test Procedure) emissions regulations, the Treasury has reviewed its tax rules, and electric car drivers will be no longer be required to pay it in 2020/21.
A rate of 1% will be applied in 2021/22 and 2% in 2022/23, so this is excellent news for anyone considering a Battery Electric Vehicle or BEV. These new rates will hopefully also have significant impact on the further adoption.
With the correct charging infrastructure in place at home or at work, many company car drivers will be able take advantage of the fantastic cost savings. It seems reasonable then to expect BEV demand from company car and grey fleet drivers to rocket.
For example a 40% tax payer opting for a Hyundai Kona Electric with a range of 279 miles, will be liable for a monthly BIK contribution of £0 in 2020/21, followed by approximately £12.50 per month in 2021/22 and around £25 per month in 2022/23.
This announcement means a huge leap forward for the electrification of the UK’s car fleet at large and will drive the production of a greater range of vehicles.
As production capacities are at the moment much lower than for traditionally fuelled vehicles, supply of BEVs is already outstripped by demand, so drivers may end up waiting a significantly longer time to take delivery of their new vehicle.
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