EVs - reduction / withdrawal of salary sacrifice

[Slow progress]

Hi All,

Does anyone have any information on what the government are doing on reducing/removing the salary sacrifice incentive rate on EVs?

Our leasing company has strongly hinted that they’re extremely concerned that theres going to be a raid on this aspect and I’m keen to understand the potential impact (s).

Many thanks,
D

[theboss]

The BIK rates are set to increase by 1% per year starting in April next year, so your BEV's will go from 2% now to 3% in April, then 4% in 2026 and will do so until 2028 supposedly.

Same with hybrid rates they will increment the same way i.e. 8% now will become 9% in April

Probably fair to assume that the best days are over in terms of EV tax treatment. However I doubt the government will really want to 'raid' EV's too hard as they are trying to incentivise the uptake.

VED will also start next year for new registrations, including the 'luxury' element on cars with RRP over £40k

[ucb]

It would be pretty straightforward for the Government to alter the P11D calculation rates for ZEVs but it would be at odds with their agreements to improve air quality and CO2 emissions

[Mammasaid]

It's almost as if your leasing company wants you to commit "before the rates rise", thus giving them more business.

[Basil Brush]

I've seen a scrappage scheme mentioned, which would make more sense to me than the current SS approach.

[RayDonovan]

I could see them amending the SS benefits for non-EVs but just can't see how they'd implement any reduction for EVs without completely destroying the new EV market in the UK...

Might be wrong

[DMZ]

With the ZEV mandate in place they can easily reduce incentives. Manufacturers are basically forced to sell EVs. The obvious thing to do is to cap the BIK allowance. I doubt a Labour government is interested in subsidising Porsches etc.

[Sheepshanks]

RayDonovan said:

I could see them amending the SS benefits for non-EVs but just can't see how they'd implement any reduction for EVs without completely destroying the new EV market in the UK...

Might be wrong

I wonder how many NHS staff have gone for salary sacrifice cars? If it's significant, that might cause the Governement to leave it alone - apart from staff anger, there's also a significant pension contribution saving for the NHS.

[RayDonovan]

Sheepshanks said:

RayDonovan said:

I could see them amending the SS benefits for non-EVs but just can't see how they'd implement any reduction for EVs without completely destroying the new EV market in the UK...

Might be wrong

I wonder how many NHS staff have gone for salary sacrifice cars? If it's significant, that might cause the Governement to leave it alone - apart from staff anger, there's also a significant pension contribution saving for the NHS.

Good point.

[Wagonwheel555]

ucb said:

It would be pretty straightforward for the Government to alter the P11D calculation rates for ZEVs but it would be at odds with their agreements to improve air quality and CO2 emissions

If it generates revenue, they seem to be quote happy to play fast and loose with their morals.

[ashenfie]

RayDonovan said:

I could see them amending the SS benefits for non-EVs but just can't see how they'd implement any reduction for EVs without completely destroying the new EV market in the UK...

Might be wrong

There has to be a point when EV can stand on their own two feet. The environment argument is very week as we could much more for less by fix rail freight and home central heating. It not as if EV support a UK car industry either.

[RayDonovan]

ashenfie said:

RayDonovan said:

I could see them amending the SS benefits for non-EVs but just can't see how they'd implement any reduction for EVs without completely destroying the new EV market in the UK...

Might be wrong

There has to be a point when EV can stand on their own two feet. The environment argument is very week as we could much more for less by fix rail freight and home central heating. It not as if EV support a UK car industry either.

Agree on the EV bit but we're not there yet.

[jinba-ittai]

Sheepshanks said:

I wonder how many NHS staff have gone for salary sacrifice cars? If it's significant, that might cause the Governement to leave it alone - apart from staff anger, there's also a significant pension contribution saving for the NHS.

Probably less than you'd think, vast majority of NHS staff are not high rate tax payers so the scheme doesn't really make sense for them.

Also - looking at the prices for the NHS SS scheme, I wonder if some degree of pension scheme saving is factored into the prices? given how much cheaper their prices are compared to other SS schemes