Fleet News

Agency's benefits tax formula 'muddies cloudy waters'

RADICAL plans to base company car tax on an all-encompassing environmental measure would massively delay the introduction of the new benefit-in-kind tax system, it was claimed this week. Meanwhile, fleet bosses have criticised the Government for trying to do too much to satisfy the 'green' lobby too quickly in its attempts to create the new company car tax system.

The new regime is due to come into force in April 2002 and, under current proposals, will see company cars taxed on a percentage of their list price and graduated by their carbon dioxide emissions ranging from 15% for the least-polluting models - those with a CO2 rating of 135g/km or below - rising to 35% for the 'dirtiest' cars, together with a possible 3% penalty for diesels.

But a far-reaching formula from an Environment Agency executive would broaden the measure of a car's 'green' credentials based on a 'cradle to grave' system from manufacturer to disposal and including emissions of CO2, oxides of nitrogen, sulphur and particulates. However, several fleet chiefs have said they are exasperated by news of the agency's plan: they say it 'further muddies the already cloudy waters' of the system they had been promised will be ready for introduction in 2002.

ACFO's Stewart White said it would take months for all interested parties to reach a consensus on how these various emissions should be weighted to establish an industry-wide accepted environmental score, drastically delaying the introduction of the new benefits-in-kind regime and leaving fleets in the dark for even longer about the most tax-efficient cars for their drivers.

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