Alphabet urges Chancellor to clarify Benefit-in-Kind rules

Alphabet, the business mobility and fleet management provider, has called on the Chancellor to address how zero-emission company cars will be taxed as part of any overhaul of the UK’s road taxation system in today’s Autumn Budget.

She warned that failing to update Benefit-in-Kind (BIK) rules alongside wider road tax reform risks leaving thousands of company car drivers uncertain about future costs.

“Unfortunately, experience tells us that, historically, Governments have been slow to consult on policy change, sometimes to the detriment of consumers,” she said. “Data shows that zero-emission vehicles uptake continues to grow but, as with any new experience, many first-time EV drivers are likely to be approaching it with some degree of apprehension. This Government therefore owes it to company car drivers to be as clear and transparent as possible when it comes to future zero-emission vehicle policy.”

BIK rates for company cars are currently confirmed only until 2029/30, when the rate for zero-emission vehicles will rise to 9%. Rates for combustion-engine vehicles are set to be capped at 39%. With the 2030 ban on new pure petrol and diesel car sales approaching, industry figures expect the Government will need to introduce a revised BIK structure for the 2030/31 tax year.

Sandall-Mansergh cautioned that, with a General Election due before the end of the decade, ministers may not prioritise every element of the transition to zero-emission fleets. “The risk is that the Treasury is so focused on the ‘here and now’, particularly in light of budgetary challenges, that they won’t give the necessary attention to revising the tax on company cars until much later in the decade,” she said. “For current and future zero-emission company car drivers, it creates a situation where they’re expected to commit to the switch without fully understanding what the personal cost may be later down the line.”

She reiterated her call for the Chancellor to use this week’s Budget to signal progress. “This week’s Budget is an opportunity for the Chancellor to, at the very least, signal that the Treasury is considering the full taxable cost of running an EV, including the necessary reform to the BIK structure.”

To prevent last-minute policymaking, Sandall-Mansergh urged the Government to begin consulting industry stakeholders, including leasing providers and fleets, as soon as possible. She expects future taxation models to prioritise fairness, encourage low-emission manufacturing and incorporate well-to-wheel emissions analysis.

She believes that, regardless of the agreed approach, the Government needs to work with the industry to help shape the changes. In doing so, it will create a workable, lasting solution that is fair to all parties, while minimising cost and disruption.