Fleet News

Auto transmission tax blow to disabled drivers

THOUSANDS of disabled company car drivers forced to run vehicles with an automatic transmission on health grounds face being penalised under the future carbon dioxide-based benefit-in-kind tax system. The Government is proposing that from April 2002, company car tax will be based on a proportion of a car's list price determined by its CO2 emissions.

Vehicles with automatic transmissions cost more than manual equivalents and emit more carbon dioxide, creating a double tax whammy for drivers. For example, a £14,500 Ford Focus 1.6i 16v Ghia saloon manual emits 174g/km compared to the £15,000 automatic's 193g/km, and a £14,700 Vauxhall Vectra 1.6i 16v LS saloon manual emits 173g/km, almost 30g/km less than the £15,650 automatic's 202g/km.

The Inland Revenue declined to comment because it is still finalising the new tax system. Under the current BIK system, 'severely disabled' drivers are exempt from paying benefit tax if their company car has been 'specially adapted' and used exclusively for work, although this can include the journey to and from work.

But the Inland Revenue does not treat automatic transmission as a special adaptation. Disabled Drivers Association executive director Douglas Campbell said: 'It would be grossly unfair if a disabled driver faced a higher tax bill because of the need for an automatic car. In some cases the disabled need a larger, more expensive car or van in order to accommodate their wheelchairs - and now they face being clobbered by the tax man.'

An estimated 10% of all company car drivers - roughly 300,000 people - have to consider their own disability or that of a family member when choosing a car. Tony Leigh, ACFO chairman has urged the Inland Revenue to base taxation of disabled drivers on the equivalent manual version of a car, thus placing it in a lower percentage band and a lower list price.

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