Fleet News

Clear the car tax confusion

FLEET managers are being warned not to be blinded by confusion over the future shape of company car tax and use the information available now to help drivers pick tax-efficient fleet cars or risk facing increased costs. As the Government once again seems to be changing its stance on the shape of the new carbon dioxide-based tax, Fleet Management Services has issued a company car tax calculator as a guide for 'responsible' fleet managers.

Meanwhile PHH Vehicle Management has warned that drivers not expecting a tax increase for gas-guzzlers could decide to abandon their company cars when the new tax arrives in 2002. The calculator includes a 3% surcharge for diesel, but last week Fleet NewsNet revealed the Chancellor of the Exchequer was having a rethink which could see common rail diesel engines taxed at a 1% surcharge, while other engines pay 3%. The starting level for taxation could also change from an expected 135g/km of CO2 to between 150g/km and 160g/km and the upper limit change from 231g/km to 250g/km or 250g/km. FMS is using 165g/km as a starting point.

Glyn Williams, fleet analyst at FMS, said: 'Our tax calculator provides a guide to drivers and fleet managers so they can see what could happen and act. Although the exact figures may change, the general idea will remain the same.' PHH Vehicle Management client services manager James Langley warned: 'To protect the taxation position of the driver in selecting a new car, and to limit the costs of operating the fleet, operators need to take steps to limit their exposure, in case drivers try to abandon their existing cars if they are hit with higher taxes.'

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