Fleet News

Labour set to shake up company car tax

THE Government is to review the three-year-old list price-based system of company car taxation in a bid to promote more environmentally responsible corporate travel. The review will be a central element in the Government's White Paper proposing an integrated transport solution, due to be published next spring.

Transport Minister Gavin Strang, along with deputy Prime Minister John Prescott and Environment Minister Michael Meacher, will examine key areas of transport and its impact on the environment. They are likely to investigate benefit-in-kind taxation on company cars - changed from an engine-based system to one relating to a car's list price on April 6, 1994 - including the existing 2,500 and 18,000 business mile parameters, the provision of fuel for private mileage and free car parking spaces.

Simultaneously Chancellor Gordon Brown is understood to be studying taxes designed to increase the cost of operating cars. The Government's long-expected clampdown on vehicle use was revealed as two Department of Transport backed guides were published 'Companies and Cars - The Way Forward' and 'Changing Journeys to Work - An Employers' Guide to Green Commuter Plans'.

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