Chancellor makes £1.4 billion U-turn on Diesel Benefit-in-Kind Tax
The emissions scandal has given the Chancellor the pretext to make a complete U-turn on diesel benefit-in-kind tax. The decision to delay scrapping the 3 percent surcharge will cost fleet diesel drivers £1.4 billion between 2016 and 2021.
The Government’s review document highlights the growing issue around real-world mpgs and emissions. The Government says it is waiting until 2021 because that’s when EU-wide testing procedures will ensure new diesel cars meet air quality standards even under strict real world driving conditions.
In the meantime, fleets can soften the impact of this latest move against diesel company cars if they collect real world data on their own vehicles and use it to drive allocation strategies. TMC’s mileage capture data shows that some diesels’ real life fuel costs are 20-30 percent higher than you’d expect from their test results. Given that diesel BIK is now set to remain more expensive for an extra five years, one action fleets can take is to use real-world data to seek out models with the optimum balance of BIK banding and real life mpg.