Latest news with #BenefitinKind
RTÉ News
5 days ago
- Automotive
- RTÉ News
Government revenue from taxing fossil fuels expected to drop
New documents published by the Department of Finance have warned that the Government's revenue from taxing fossil fuels will drop as consumers move to using electric cars and heat pumps. The Tax Strategy Group paper says as the reliance on fossil fuels declines for energy and transport, the revenue raised by environmental taxes will also reduce. The paper takes into consideration Ireland's legally binding climate commitment to reduce Greenhouse Gas (GHG) emissions by 51% by 2030 and to achieve carbon neutrality by 2050. It highlights that over the next six years (from 2025 to 2030), it is projected that the net carbon tax volume levels of mineral oils, solid fuels and natural gas usage will fall, and estimates indicate that net carbon tax energy related CO2 emissions will also decline. In the longer term, this will mean revenues raised by environmental taxes, such as the Carbon Tax, derived mainly from home heating, petrol and diesel, will decrease and will need to be replaced by other revenue raising measures. The group's paper notes that while taxation of energy products should incentivise consumers and industry to make better choices for the environment, policy consideration of any tax measure needs also to be cognisant of a range of factors. These include the impact on the Exchequer, availability of viable alternatives, competitiveness impacts, potential regressive impacts and interaction with adjacent policy measures. Budget options to raise money The paper recommends budget options, including fiscal measures, to potentially raise money for the Exchequer and encourage behavioural change linked with reducing road transport emissions. It suggests if a 1% VRT rate increase was considered across bands 11-20, such as hatchbacks and SUVs, which would only affect cars with above average emissions, then it is estimated to raise €28 million based on 2024 registrations. While increasing the VRT Nitrogen Oxide surcharge by €5 per mg/km across all thresholds would raise €15.5 million (based on 2024 data). It also examines emissions-based VRT for Category B vehicles or light commercial vans, suggesting an option for an increased rate of 15% for vehicles with emissions of 261g/km and over. According to data from SIMI to year end in May, the market share for light commercial vehicles is 93.2% diesel and 4.4% electric. However, there is growth in the EV market share compared to 2024 figures, although it also noted a year-on-year decline in light commercial vehicle registrations. Based on Revenue data from 2024, the paper suggests the net impact of the introduction of a surcharge rate of 15%, taking into account the 8% rate effective from July, for vehicles with emissions of >260g CO2 per km is estimated at being in the region of €1 million. It also outlines an option to reduce the Benefit in Kind (BIK) liability for zero emission vehicles to increase the uptake in the corporate fleet, and future options that may include the introduction of an emissions-based BIK rate for vans.
Daily Record
04-06-2025
- Business
- Daily Record
Changes to employee perks including salary sacrifice and benefits in kind could be announced next week
New HMRC surveys suggest valuable employment perks could be under threat. Income tax rises for Scots in April - how the changes affect you Two new surveys published by HM Revenue and Customs (HMRC) indicate that valuable employment perks such as salary sacrifice pension schemes and Benefit in Kind arrangements could be in Chancellor Rachel Reeves' crosshairs ahead of the Autumn Budget, possibly at the Spending Review on June 11. The first survey, 'Understanding the attitudes and behaviours of employers towards salary sacrifice for pensions', examined a number of hypothetical scenarios to test the reaction of employers to possible changes to salary sacrifice schemes for pensions. Under such schemes, employees give up a portion of their salary which the employer pays instead into their pension as an enhanced pension contribution. This arrangement results in employer and employee National Insurance Contributions (NIC) savings, as the amount of salary sacrificed and corresponding employer pension contributions are exempt from both income tax and NIC. Scenario one in the study removed the NIC exemption for employers and employees, resulting in employer and employee NIC charges on the salary that the employee sacrificed. Scenario two removed both the NIC exemption for employers and employees and the income tax exemption for employees, on the salary sacrificed. Scenario three removed the NIC exemption but only on salary sacrificed above a £2,000 per year threshold. While employers noted that all three scenarios would likely affect employee morale, they felt that scenario three would be the easiest to 'sell' as there would be a greater understanding from employees as to why it was introduced. A further survey, 'Research with employers on Benefits in Kind and expenses', looked at the prevalence among employers of offering Benefits in Kind to employees. That survey found that these were more common among medium and large employers, the most common in this group being workplace parking (39%), company cars (29%) and cycle to work schemes (23%). Around a quarter of medium and large employers said they offered Benefits in Kind through salary sacrifice arrangements (26%). Caroline Harwood, head of employment tax at accountancy and business advisory firm BDO said: 'You can understand why the Chancellor might be interested in reviewing the tax reliefs for pensions salary sacrifice schemes. 'The most recent figures show that the cost of NIC tax reliefs from contributions to, and benefits from, registered pension schemes reached £23.5 billion in 2023/24. Meanwhile the cost of Income Tax relief for registered pension schemes reached £28.5bn in the same period. 'Previous chancellors have shied away from taking this 'low hanging fruit' because of the furore that changes to pensions tax causes - and because saving for retirement has generally been seen as something to encourage. 'One subtle way the Chancellor could feasibly seek to cut some of this cost would be by limiting the NIC exemption to say £2,000 to £5,000 of total salary sacrificed for all benefit types - after all the self-employed cannot benefit from this perk. However, such a change would still be unpopular and reduce incentives for employers to offer salary sacrifice schemes and for employees to make suitable provision for their retirement. 'It would also add new burdens on employers who would have to calculate the excess if people went over the threshold.' Ms Harwood added: 'Employees currently using Benefit in Kind incentives through salary sacrifice schemes could also lose out if the current incentives were reduced. This could have a particularly big impact on those taking advantage of such schemes to lease Electric Vehicles - another arrangement previously encouraged in the context of the path to Net Zero.' Salary sacrifice allows employees to exchange part of their salary for non-cash benefits, such as pension contributions, in a tax-efficient manner. These contributions are exempt from income tax and NICs, making them attractive and more affordable for both employers and employees.
Yahoo
12-05-2025
- Automotive
- Yahoo
CBVC supports Champions UK with rollout of EV salary sacrifice scheme
CBVC Vehicle Management has partnered with business consultancy Champions (UK) plc to implement a new electric vehicle (EV) salary sacrifice scheme for the company's employees, strengthening its position in the corporate EV benefits market. Launched in late February, the scheme is now open to eligible staff across Champions' 100-strong workforce, according to a press release. CBVC is managing all aspects of the programme, from vehicle procurement to employee onboarding. Four battery electric vehicles (BEVs) have been delivered so far. The scheme offers only full BEVs, enabling employees to access lower Benefit in Kind (BiK) tax rates while supporting Champions' carbon reduction strategy. Mike Manners, Managing Director at CBVC Vehicle Management, said: 'We're delighted to support Champions UK in delivering this new employee benefit. EV salary sacrifice is increasingly relevant for employers looking to reduce national insurance contributions and enhance their attraction and retention offering. The timing is ideal as businesses face rising employment-related costs.' Champions, which operates across events, entertainment, influencer marketing and speaker management, selected CBVC for its consultative and responsive approach. John Hayes, CEO of Champions, said: 'We chose CBVC over other providers due to their personalised service and professionalism. The team has been quick to answer questions and make the rollout smooth and transparent.' Salary sacrifice schemes allow employees to lease an EV using a portion of their gross salary, reducing income tax and NIC liabilities. Employers also benefit from NIC savings while offering a sustainable, high-value perk. "CBVC supports Champions UK with rollout of EV salary sacrifice scheme" was originally created and published by Motor Finance Online, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Business Mayor
27-04-2025
- Automotive
- Business Mayor
Drivers of these popular vehicles face 'over £7,000' car tax – check if you are hit
Thousands of drivers could be left thousands of pounds worse off as a major tax change hits popular double-cab pick-up trucks like the Ford Ranger, Isuzu D-Max and Toyota Hilux. From April 6, new Benefit-in-Kind (BIK) tax rules mean these vehicles are no longer treated as vans but as company cars, dramatically increasing the amount of tax owners must pay. Experts warn some drivers could be slapped with annual tax bills of up to £8,000. The crackdown follows a 2020 Court of Appeal ruling that found double-cab pick-ups were not primarily suited to business use. This ruling forced HMRC to scrap the old one-tonne payload test that classified them as vans. Under the old system, pick-ups were taxed at a flat BIK rate of £3,960. Now, they're taxed based on carbon emissions, and many diesel pick-ups fall into the top 37% emissions band. For a £45,000 truck, a basic rate taxpayer now faces a bill of £3,330 a year, while higher rate taxpayers could pay around £6,660. Auto Traders experts warned earlier this year that bills for these drivers could jump above £7,000. They said: 'Previously, the BIK for a 'commercial vehicle' like a pickup truck was fixed at £3,960 regardless of emissions or price. 'But from April, a high-priced double-cab pickup, a £50k Ford Ranger, for example, would fall into a 37 per cent BIK rate, meaning £3,550 in yearly tax for 20 % taxpayers, or just over £7,000 for people in the 40 % bracket.' Fuel benefits are also changing, with pick-up drivers moving from a £757 van rate to a hefty car fuel benefit multiplier of £28,200, again based on emissions and income. Experts say in many cases, claiming fuel benefit will no longer be worthwhile. Read More Irish figures show €6bn drop in trade with Great Britain Capital allowances for pick-ups have been tightened too, meaning owners can no longer claim generous deductions against profits. However, transitional relief is in place: those who bought or leased a pick-up before April 6 can stay under the old rules until 2029, offering a limited window to avoid the full brunt of the changes. Finsbury Robinson, a leading tax firm, said: 'Many business owners will be considerably worse off, but choices can still be made to minimise tax liabilities.' In response to the changes, a petition has been launched on the official Parliamentary website, calling on the Labour Government to 'reverse the Tax Treatment of Double Cab Pickup Trucks in the 2024 Autumn Budget'. Addressed to Chancellor Rachel Reeves, the petition argues: 'We think this change will harm many businesses, farmers, tradespeople, and individuals relying on double cab pickups for work, making work vehicles costly. Reclassifying them as cars drastically raises costs by increasing Benefit in Kind tax and lowering their capital allowances.' It highlights the crucial role pick-ups play in rural operations, pointing out their heavy load capacity and ability to handle rough terrain. If the petition reaches 10,000 signatures, the government will issue a formal response; at 100,000, it will be considered for debate in Parliament. READ SOURCE
