Fleet News

Peugeot to launch tax cheating car scheme

PEUGEOT is planning to launch a benefit-in-kind tax-beating personal contract purchase-style scheme aimed at high mileage company car drivers before the end of the year. Known internally as the 'Fleet PCP', it is being drawn up to enable 18,000-plus business mile company car drivers to have 'all the benefits of a company car without the pain of company car tax'.

Under the Government's 2002 company car tax changes which see the scrapping of the current vehicle list price/business mileage arrangement in favour of a list price/carbon dioxide emissions scheme, high business mileage drivers face huge increases in tax bills unless they radically change their driving habits.

Peugeot fleet and leasing director John Taylor said: 'High mileage drivers will be severely affected by the tax changes and it is being increasingly talked about in the industry as that fact is being realised.

'It is something which the Government must resolve. There is enormous pressure on high mileage company car drivers to move out of the company car culture because of the forthcoming tax burden.'

However, such a move would be unpopular with the Government and employers as it could lead to a surge of 'old bangers with bald tyres' taking to the UK's roads, severely impacting on environmental clean-up targets, accident reduction targets and corporate images. It is against that background that Peugeot will launch, if necessary, a product which will allow high mileage company car drivers to take to the wheel of new cars without facing the pain of high company car tax bills.

Taylor said the company was working on a PCP-style product - but denied that it was a Whitechapel-type scheme as marketed by First National Vehicle Holdings.

Under the scheme, employers will organise and control the policy and employees will receive a cash sum to help cover the cost of the car and a mileage allowance which combined will cover business use of the vehicle.

'It is our response to a situation which we hope will not exist,' added Taylor. 'We hope the Government will see sense and change the system. But we are already facing situations where peoples' decision making is determined by what the tax situation will be and we need to be able to offer a solution. It is in the Government's interest to change the tax structure because it will lose money.'

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