Fleet News

Essential car use policy under attack

THE Government has been attacked for ignoring the plight of essential company car users both in changes to company car tax imposed in the Budget and in the new CO2-based company car tax proposed for 2002. Opposition MPs have attacked the Government for not thinking through its approach to company car tax.

During a debate on the Finance Bill, Patricia Hewitt, Economic Secretary to the Treasury, fended off claims that the Government lacked understanding of the needs of fleet drivers. The Government also defeated an amendment looking to soften the blow of tax hikes imposed on high-mileage business drivers in this year's Budget and approved the new levels of taxation.

Changes to company car taxation - which are expected to run for the next three years - see discounts for drivers in the 2,500-plus and 18,000-plus business mileage bands reduced, while perk cars users who travel less than 2,500 business miles are unaffected.

Stephen Dorrell (Cons) said: 'Whatever the incentives on environmental grounds, it will remain true that some drivers have the car as a perk and others as an important work tool. The second group should be treated differently in the tax system. If the system does not draw the distinction, we shall go straight back to the world of a few years ago, when employers provided cars for those who did not need them as a tax-efficient form of remuneration.'

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