The new company car tax system will be introduced from April 6, 2002, and works by taxing a car on its carbon-dioxide emissions, measured in grams per kilometre, and a percentage of its list price. The 'average' fleet car, producing between 190 and 210g/km of CO2 would pay between 20% and 24% tax, although there is a 3% supplement for diesels. Currently the tax system is based on 35% of list prices, dropping to 25% for drivers who cover between 2,500 and 18,000 miles and 15% for drivers covering more than 18,000 miles, so they are most likely to face a tax hike.
HSBC Vehicle Finance is warning that drivers could face tax increases of up to 60%. Moreover, because company cars already acquired operate under cycles of three years or more, the firm warns the car chosen today will define the tax paid next year. Tim Holmes, director and head of HSBC Vehicle Finance, said: 'The vast majority of drivers have little knowledge about the new benefit-in-kind taxation. So come 2002, a potential tax bomb is ticking for the company car driver who does over 18,000 miles a year.
'Among those who do not know, there is still a lot of confusion and uncertainty about the details of the scheme. That is where the tax calculator will prove invaluable, as it will empower drivers to appreciate the implications of their choice of car.'
The tax calculator covers specifications such as CO2 rating, fuel benefit tax payable, insurance group, fuel consumption, engine size, as well as a list of standard optional extras. All HSBC customer fleet managers will be provided with a CD-ROM containing the calculator and installation programme. In addition, revisions emailed every week will mean the latest data is always available, according to the company.
- To order your copy of the tax calculator, visit the website or call HSBC on 0845 609068.