Fleet News

Fleets convinced tax plan changes will fail

THE Government's plans to radically alter the company car benefit-in-kind taxation system looks likely to fail in its prime objective of encouraging drivers to take a more environmentally-conscious attitude to vehicle choice. A number of fleet chiefs at the Drive '99 Alternative Vehicles Show incorporating Diesel Drive sponsored by Calor Autogas at Gaydon said there was no evidence that attempting to persuade drivers to opt for less polluting vehicles by hitting them in the pocket would work.

They claimed many would continue to base their car choice on looks, performance and prestige and then shoulder the burden of a higher tax bill. From April 2002, the Inland Revenue is planning to introduce a system which will mean company cars taxed on a percentage of their list price and graduated by their carbon dioxide emissions, with those emitting less attracting a lower charge. Diesels are likely to attract an additional 3% penalty.

The slow drip-feeding of information from the Inland Revenue, which has been widely criticised by the fleet industry, is also contributing to the 'laissez-faire' attitude since it has left fleet managers unable or unwilling to begin educating their drivers on the changes because of continuing uncertainty about how the system will finally operate.

Terry Hill, administration manager of 75 cars at Rumenco, which is part of the Tate and Lyle Group, said tax changes had little impact on driver choice. 'All our reps are quite happy not to question the tax changes and will go for the highest price car within their choice category,' he said. David Faithful, a partner at solicitor Amery-Parkes, which has a 30-vehicle user chooser fleet, said the lack of knowledge about the new tax system and even the uncertainty about which fuel the Government would favour was preventing a revision by drivers of their car preferences.

But Littlewoods has embarked on a radical policy of moving its perk car drivers into PCPs, and so far 80 drivers have made the switch to PCPs out of a potential figure of 450. Fleet manager Colin Burns said: 'People are still choosing quite flashy sports cars. Before introducing PCPs we had an open-choice policy with some restrictions on certain makes and models, but now employees have access to cars that weren't allowed before and they are going for them in a big way.'

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

Comments

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