AMONG the good and bad news in the Chancellor’s Autumn Budget was buried a nugget which most people seem to have missed – benefit in kind and the fuel benefit charge on van drivers will be increasing next year.
Company van tax on van drivers has been rather a grey area since it was changed in 2005. In the old days drivers had to pay tax if vans were taken home at night, but at present most drivers don’t pay it as they are now allowed to take their vans home and use them occasionally to pop down to the shops without coughing up.
But those who can use their vehicles at weekends, holidays etc have a £3000 Benefit in Kind (BIK) charge loaded on to their tax bills, which means 20% taxpayers have to pay £600 a year in company van tax. If free fuel is included, another £564 in BIK is added, which increases the tax bill by £112.
From next year Chancellor George Osborne has decided that the BIK rate will rise to £3090 and the fuel charge to £581, which means drivers will pay £618 and £116 respectively.