Fleet News

Drivers to take cars not cash

GOVERNMENT statisticians believe the number of company car drivers will rise under the new benefit-in-kind tax regime at the expense of personal motoring plans. Forecasts suggest that drivers at the tax band margins who have opted for a cash allowance in lieu of a company car will move back into the fleet fold when the new regime becomes effective in April 2002.

Sara Woollard, policy adviser to the Inland Revenue, said: 'Provisional analysis suggests that people who do not drive many business miles could downsize, and we expect some to cash in their allowance and move back into a company car.' This will not undermine the 'green' credentials of the new environmentally-based company car tax because drivers will have to choose cleaner, more fuel-efficient, vehicles to cut their tax bills.

The new tax will be based on a proportion of a car's list price, graduated by carbon dioxide emissions per kilometre. This means that drivers prepared to choose a more fuel-efficient vehicle can achieve significant tax savings. Broadbrush figures suggest that the new system could start at 15% of list price for vehicles emitting less than 135g/km of CO2, and rise by 1% of list price for every additional 5g/km of CO2.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee