Diesel supplement in company car tax to increase by 1%

company carsAutumn Budget 2017: The government has announced that the existing company car tax diesel supplement will increase from 3% to 4% in April 2018.

This will only apply to diesel cars that do not meet the latest emissions limits.

In the Autumn Budget 2017, Chancellor Philip Hammond also announced that, from April 2018, the first year vehicle excise duty (VED) rate for diesel cars will go up by one band.

This will not apply to diesel cars that meet the emissions limits.

These measures will help fund the new £220 million Clean Air Fund, announced in today’s budget, that will help to improve air quality around the UK.

In addition, the government has announced that the fuel benefit charge and the van benefit charge for company cars will both increase in line with the retail prices index (RPI) from 6 April 2018.

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Claire Evans, head of fleet consultancy at Zenith said: “The diesel [benefit-in-kind] BIK supplement will increase by 1% from April 2018. It is disappointing news for drivers in existing diesel cars who will be subject to the rise and not given time to move into cleaner technology.

“The move will encourage fleet providers into the cleanest diesel engines alongside petrol and [ultra-low emission vehicles] ULEV vehicles in the long-term. And give fleets more clarity to enable better planning on policy choices.”