Fleet News

Free fuel tax loophole for alternative fuels

FLEET managers turning to alternative fuel could be making their drivers victims of a punitive tax loophole. Vehicle management specialist Arval PHH is predicting that drivers who receive free fuel for private mileage from their employers face having to drive twice as many miles to take advantage of the perk.

Drivers have to pay the same level of tax if they receive free fuel for private mileage whether they receive petrol, diesel or alternative fuels and the Government is currently pushing up the tax charge by 20% above inflation each year.

However, because alternative fuels are half the price of conventional fuels, drivers face having to cover twice as much private mileage to make the benefit worthwhile.

Martin Hender, director of fuel management at Arval PHH, said: 'The Government makes a big play about being environmentally friendly and promoting greener fuels, but at the same time this new tax structure hurts a lot of LPG users right in the pocket.

'The Government needs to clear up this issue fast, otherwise we may see a move away from LPG vehicles by company car drivers and that would spell disaster for the Government's 'cleaner cars' plans.'

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