BIK question for 2023/2024

[kilbysan]

Hi all,

i know that the current view on BIK is:

2020/2021 = 0%
2021/2022 = 1%
2022/2023 = 2%
2023/2024 = ?

So my question is do we know what is being proposed for 2023/2024 - is it going back to 16%?
Surely that would be crazy if the government is trying to push us into EV's and ends up removing the incentive

Anyone know or is it still all up in the air?

 

[audigex]

We don't know, is the short answer. The rates have only been confirmed up to 2022-23

For the long answer:

We don't know, we can only speculate: I would be surprised if it jumped straight back to 16%, though - I'm expecting it to either stay at 2% for a few years and then slowly ramp up, or to simply ramp up: most likely by 1-2% per year, but we could also see something more aggressive like 5%, 7%, 10%

But that's only speculation and expectation: there's no guarantee and it's entirely possible that the government could put it straight back to 16% or even to a more "standard" 20-30%. The latter would be very surprising, though.

Then there's the question of whether it would apply retroactively: it would be particularly harsh of the government to apply a higher rate to old leases, but when have they ever acted consistently or sensibly? So any changes may apply to cars registered from April 2023, or they may apply to all EVs (like the 2020 change does, in our favour).

 

[MOBB]

I think it will continue to slowly rise until the government have persuaded enough people to make the switch. 1% per year ongoing is my guess

 

[Russinating]

As above, literally nobody knows. By the time 2022 comes around the chancelor at the time could scrap the 2% and change it to whatever. The planned rates aren't guaranteed.

 

[Jason71]

technically the rules for the next 3 years are not even set in stone. They are not in any legislation yet and could all be changed at this budget. Not trying to worry anyone. very unlikely to happen but if its too successful they could backtrack on 2021 or 2022 at any point. Again unlikely but never say never. remember the corporation tax cut to 17% planned for april 2020?

Assuming none of that happens I agree with most that a ramp up rather than a jump is likely and I doubt we will have to wait years to find out. Since most CC's are bought on 3 year leases. companies will be clamoring the govt to announce the 2023 rates by this time next year.

Highly highly unlikely that the 2% will be held for existing EV's while higher rates put in place for new vehicles. I am sure part of the point of this exercise is the get companies to pick up the currently high purchase price of EV's and funnel them into the private second hand market. if the rates go up only for new vehicles that would make CC owners want to hang on to their current cars indefintiely and other CC drivers to want to buy them if they did hit the second hand market so would be totally counter productive.

 

[Cooper1275]

I can imagine when the impact of petrol sales declining impacts the treasury, this will determine how quickly the BIK tax rises and will be one way of recouping the tax lost through fuel tax.