Experts are urging businesses and employees alike to ready themselves for imminent alterations to Benefit in Kind (BiK) regulations in the United Kingdom. These changes are a consequence of the UK’s ongoing commitment to encouraging greener travel options and reducing emissions, and their impact is projected to be significant.
The primary transformation to anticipate relates to company cars. The UK government has instituted a reduction in the tax on electric company cars to nullify cost burdens and stimulate a shift towards environmentally-friendly commuting. This dramatic move marks a zero-percentage BiK tax rate on electric company cars in the 2020/21 tax year, a notable decrement from the 16% charged in the 2019/20 tax year.
Acumen Accounting’s Head of Tax, Matthew Walters, addressed the urgency of this matter, “There seems to be a lack of awareness surrounding BiK changes. Companies and employees need to understand these modifications, given their potential financial implications. We’re encouraging them to act now.”
As per Walters, many businesses are yet to fully grasp the gravity of these adjustments and the potential savings they could accrue by capitalising on them. He states, “Companies that haven’t started planning for the BiK revisions are falling behind. With the potential for significant cost savings, especially for businesses with large fleets, prompt action is crucial.”
Aside from the BiK changes related to company cars, the country is set to witness other amendments impacting private fuel, vans, and van fuel. One of the leading fleet management companies, Fleet Evolution, recently published an online guide to help companies prepare for the shift.
The UK’s BiK revisions will be a boon to manufacturers and suppliers, including Tesla, Renault, and Nissan, to name a few, while also promoting a cleaner climate. The Society of Motor Manufacturers and Traders (SMMT) has reported a surge in demand for electric vehicles, largely attributable to the BiK change. Their recent research suggests that there are more than 70 different zero-emission vehicle models available in the UK market, and it’s projected to rise.
The potential economic impact of the BiK changes is substantial. By opting for electric company cars, businesses can make significant savings in the running costs compared to internal combustion engine vehicles. Similarly, for the employees, enhanced tax incentives will make electric cars an enticing option.
“The BiK revisions will have a transformative effect – on the environment, on employee benefits, and on business savings,” states Dale Eynon, director at Defra Group Fleet Services. “But it’s vital that businesses understand what these changes mean for them and take steps to prepare.”
However, along with the financial advantages of greener commuting options, experts are highlighting the need for businesses to address their infrastructure challenges. The transition to electric vehicles will require the installation and accessibility of electric charging stations at workplaces, an area where companies are facing a lag, according to recent online research conducted by Centrica.
As the deadline for the impending BiK changes looms, it’s clear that acting promptly could secure significant benefits for employers and employees alike. Experts are urging businesses throughout the UK to familiarise themselves with the new regulations as soon as possible, provide the needed infrastructure for electric vehicles, and make the shift towards greener commuting.
As the UK steps up its commitment to battling climate change, these changes in tax policies will undeniably play a crucial role. They serve as yet another reminder that when it comes to preserving our planet, every action counts – right down to the company car we choose to drive.
Original Source: https://www.personneltoday.com/hr/act-now-to-prepare-for-benefits-in-kind-bik-changes-urge-experts/
