Fleet News

Revenue clarifies benefit-in-kind training issue

DRIVER training for company car drivers will not be taxed as a benefit-in-kind, the Inland Revenue said this week. However, skid-pan training or an off-road driving course, perhaps offered by companies as a prize to top-performing sales staff, would be taxed. The latest Inland Revenue edict on the tax implications of driver training follows an investigation by Tony Leigh, chairman of the Association of Car Fleet Operators, after an ACFO member was told by a local tax office that company car drivers who underwent driver training would be taxed.

Leigh said: 'We were not happy with the tax office's stance and thought it was a tax on safety. We are therefore pleased at the Inland Revenue's confirmation that driver training should not be taxed. The decision is a sensible one.' The Inland Revenue says legislation introduced at section 63 of the 1997 Finance Act exempts employees from being taxed on the benefit-in-kind of genuine work-related training.

The taxing of driver training has been a controversial issue with the Inland Revenue first trying to tax it as a benefit-in-kind seven years ago. It approached Hewlett Packard and threatened to impose a charge on any company drivers not covering at least 18,000 business miles annually. Three years later safety-conscious fleets were targeted again by the Inland Revenue when a company told Fleet NewsNet how staff sent on RoSPA driver training courses had been asked to pay benefit-in-kind tax by its local tax office.

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