Fleet News

Big isn't always bad for new tax

SHREWD fleet managers should be able to find a place for luxury and executive cars on their fleets, despite changes in company car tax rules next year. Thinking has it that drivers of larger cars will pay a heavy penalty from April 2002 when benefit-in-kind tax changes to being based on carbon dioxide emissions.

Some fleets are already looking to downsize and reduce mileages to help drivers keep down tax liability, but calculations by Fleet NewsNet reveal selected large cars will make little difference to BIK bills and some will lead to a reduction in taxation. Now some manufacturers are fighting back against the 'big is bad' syndrome.

Volvo's corporate sales manager Alistair Murray said: 'We want people to realise big cars aren't necessarily bad cars and CO2 must be better understood. There is always going to be a need for large cars and we have to demonstrate we can deliver them without a high environmental price.'

A comparison of BIK liability for 40% taxpayers covering between 2,500 and 18,000 miles shows company car drivers of a Volvo S80 2.4S (170bhp) would be £88 better off from April 2002, according to Swansea-based Day's contract hire tax calculator. And the driver of a Mercedes-Benz E200 Kompressor Classic would see a £93 drop in BIK liability, while a BMW 520i SE driver would find no change. But anyone driving an Audi A6 2.4SE would suffer an increase in liability of £387. The driver of a Vauxhall Omega 2.5 CDX would see a liability rise of £488, while an Alfa Romeo 166 2.5 V6 driver would see an increase of £921. The Volvo has the lowest CO2 rating of 210g/km, while the BMW follows at 215g/km with the Mercedes on 219g/km. However, the Audi's 242g/km CO2, the Vauxhall's 251g/km and the Alfa's 271g/km have a significant impact.

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