The latest Autumn Statement from the UK government is live and one area that remains unchanged for the upcoming fiscal year is benefit-in-kind (BIK) appropriate percentages for company cars. While there are significant changes to areas like National Insurance contributions and Individual Savings Accounts (ISAs), Jeremy Hunt confirmed BIK percentages will remain at 2023/24 levels for the 2024/25 period. Additionally, there will be no alterations to car and van fuel benefit charges, along with the van benefit charge.
What does this mean for British businesses, employees and motorists in general? In this article, we’ll explore how stability in these key areas impacts the automotive landscape.
A stable approach to BIK percentages
The decision to keep BIK appropriate percentages static for the next financial year offers stability to both businesses and employees. For many Brits, company cars are a major perk and BIK percentage rates directly influence the tax liabilities associated with this benefit. The lack of changes provides clarity and allows businesses and employees to plan their finances more effectively as they transition into the 2024/25 period.
For British motorists, especially those driving company cars, the decision not to adjust BIK percentages reflects Hunt’s goal to deliver the “biggest tax cut on work since the 1980s”. No, BIK percentage rates haven’t been decreased in the Autumn Statement. However, the decision to keep them stable in the face of issues like inflation offers employees much-needed relief when it comes to tax liabilities.
For companies, another year of stability simplifies budgeting and financial forecasting related to employee benefits. It’s also expected to help with issues like employee retention and satisfaction.
Fuel benefit charges and van benefit charge
The decision to maintain car and van fuel benefit charges at 2023/24 levels, along with the van benefit charge, further underscores the government's commitment to stability in the automotive sector. Put simply, it ensures the costs associated with company-provided fuel and vans remain unchanged. Once again, the key takeaway is that both businesses and employees will benefit when it comes to financial planning.
The decision is a welcome announcement for Brits who enjoy the perks of company-provided fuel. Lack of change to fuel benefit rates means the tax implications for this perk will remain consistent. In the face of soaring inflation, rising fuel prices and the cost-of-living crisis, not having to worry about an increase in fuel benefit rates is a huge relief for employees.
Impact on the British economy
The decision to keep BIK percentages, along with fuel benefit and van charges, stable has a ripple effect on the British economy as a whole. For starters, the consistency promotes security within the automotive market, which employs roughly 780,000 Brits.
The lack of changes in these critical areas aligns with the government's broader strategy to promote financial stability and economic recovery. Providing companies and employees with a consistent tax framework for company vehicles helps create an environment where businesses can thrive, and employees can enjoy reliable benefits.
Auto finance: your ticket to tax benefits
The Autumn Statement includes several policies designed to support British businesses and motorists, according to the government. This includes a steadfast approach to BIK percentages, fuel benefit rates and van charges. With security now guaranteed for the coming financial year, there’s never been a better time to take advantage of options like salary sacrifice car schemes and business car leasing.
Both fall under the auto finance umbrella and offer individuals and businesses the freedom to choose their preferred vehicles without significant upfront costs. Whether you're eyeing a sleek Audi A3 Sportback, compact Ford Fiesta or versatile Volkswagen Transporter, auto finance could be your ticket to tax benefits.
Why choose vehicle finance?
A cost-effective solution: Auto finance allows you to secure the vehicle you need without a substantial initial investment. Whether you’re an individual or a business, this helps preserve your capital for other essential expenses.
Flexible terms: With a variety of leasing options available, you can tailor your finance agreement to align with your budget and usage requirements. Choose from different contract lengths and mileage allowances to suit your personal needs and driving patterns.
Access to new models: Car finance allows you to stay ahead of the curve and drive the latest models. Many contracts include the option to upgrade your vehicle every few years, a perk that ensures you can enjoy the latest cutting-edge automotive technology. Not to mention that coveted ‘new car’ smell.
Fixed monthly payments: Fixed monthly payments simplify the budgeting process and provide financial stability and transparency throughout the leasing period.
Maintenance and service packages: Streamline your driving experience with optional maintenance and service packages. This ensures your vehicle remains in top condition without the hassle of unexpected costs.
A welcome sense of stability
By maintaining the status quo in BIK percentages, fuel benefit charges and van benefit charges for the upcoming financial year, the British government has offered businesses and individual motorists a welcome sense of stability. Interest rates, fuel and the cost of everyday essentials may be on the rise but when it comes to auto finance, the road ahead remains stable and predictable.
Want to take advantage of the current landscape? At Leasing Options we’re dedicated to helping Brits secure the best vehicle finance solutions. Whether you’re a business looking to finance a new company car or an employee hoping to leverage salary sacrifice benefits, we can help. Get in touch with a team member today to find out more about our flexible and highly competitive leasing options. When it’s time to take the wheel, you can enjoy the total peace of mind you’ve partnered with one of the top auto finance brokers in the UK.