You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
If I interpret right, BiK on an EV is only 2pct. So get an ev and on top of the monthly cost (taken from pre tax salary I assume) you’ve say 600 a year for a 30k car. My question is can the 2 pct change from year to year at the whim of hmrc or is it fixed when you take out the contract? I’m guessing the former.
Never considered a new car before on the basis that they are too expensive. I still think this is the case but maybe a closer run thing now.
It can change, but you'll get notice from The Budget. 6-12 months usually when they make taxation changes.
We've got salary sacrifice for a leccy car, but the hire cost is still rather high for a vehicle I wouldn't use much, so I'm sticking with my old car.
The 2% rate is fixed until April 2025 at 2%, and then will increase by 1% each year until 2028
Whether they stick to that is another matter of course…
Captive audience and all that
Thanks that’s helpful. Good point about the fact that fiscal policy seems to be changing like the weather at the moment
Why would you be paying BiK if the car is funded through salary sacrifice? BiK is for cars provided to you by your employer you can also use for personal use.
I could be wrong but I think you're mixing stuff up.
I could be wrong but I think you’re mixing stuff up.
not just you - seems to me salary sacrifice and company car being mixed up
There’s definitely something about the NHS car lease scheme (which is salary sacrifice) being taxed as BIK.
thread should have been called "BiK to the Future".
MrsTH definitely paid BiK on her (not leccy) salary sacrifice car.
thread should have been called “BiK to the Future”.
Respect 🙂
not just you – seems to me salary sacrifice and company car being mixed up
Some employers allow you to salary sacrifice and get a company car instead.
I would expect the bik on leccy cars to rise if labour gets in, it's clearly a tax dodge for well off people at the moment
it’s clearly a tax dodge for well off people at the moment
And also an incentive to get people into the “new technology “. Don’t forget they are taking more in sales taxes on the more expensive vehicles too . And they’ll soon be paying RFL and luxury car tax too ( most EV’s breaking the £40k barrier). Not to mention the rise in electric prices and all the lovely additional tax they are getting from that.
You keep on gripping those pearls though eh
Not necessarily a tax dodge for well off- using tax to influence behaviour like duty on cigarettes etc.
Wasn’t aware to BIK implications for salary sacrifice. Guess if you’re getting a cheap rate via your employer, then that is a benefit like a low interest rate for season ticket loans gets (or at least used to be) taxed.
It may also have some benefits in driving behaviour (otherwise it wouldn't be done), but when the only people benefitting are going to be in the top 10% of earners, it's an easy target for a populist left wing policy change.
I would expect the bik on leccy cars to rise if labour gets in, it’s clearly a tax dodge for well off people at the moment
You clearly have no idea what you are on about but I expect you'll just carry on?
I'm in the Fire Service and have an electric car on salary sacrifice. I pay BIK tax but when I got it the rate was 0%. No doubt it'll keep going up now though?
I got the i3s as at the time it was about the cheapest way to get in to a new car with a monthly cost below that of a petrol Ford Fiesta. The lease is up in May and it seems prices have shot through the roof so I will be going back to second hand as I'm not a tax dodging well off person.
prices have shot through the roof so I will be going back to second hand as I’m not a tax dodging well off person.
The high prices are exactly why it's a tax dodge for the rich. The same applies for limitless c2w schemes. You may have enjoyed the benefits but very few people who aren't in the upper tax band are getting electric company cars now (as the costs are so high). Most labour voters are not buying new cars, so the scheme is an easy target, particularly when the richer you are, the more you save
Most tax dodges have other behavioural benefits. C2w gets people on bikes, pensions get people saving for the future, childcare vouchers get people into work and SEIS and the like get folks investing in small companies. I make use of all those dodges as they save me money, but im fully aware they might shut down at any time
I think your idea of a tax dodge is a little off the mark. Using some dodgy scheme to avoid tax is a tax dodge, low VED on and EV is not. It's there to encourage people who can, move to EV purchase so eventually the cost of EVs comes down, there are second hand cars to buy and and infrastructure to charge them which will benefit everyone. Thinking of it as a tax dodge for the rich shows some very parochial thinking. Given how much the saving is vs the purchase / lease costs it's not even a good incentive really.
I understand the BiK bit now, it's not really salary sacrifice in the traditional sense, it's using some of your gross salary to fund a lease car, you then pay BiK as per any other company car driver.
What’s not clear as I’ve not done much research yet is how much the monthly lease cost is inflated Vs an open market offering.