Fleet News

Upgrade to an executive to slash your tax

QUIRKS in next April's change to carbon dioxide emissions-based tax system means some drivers could actually be better off upsizing to a bigger car.

In particular, employees who drive powerful petrol-engined cars could find themselves able to give the appearance of climbing the corporate ladder by changing to a larger model with a diesel engine.

For example, a driver currently in a Peugeot 406 2.0 GTX saloon will be taxed on 21% of its £17,095 P11D price, because of its CO2 emissions of 197 g/km, creating a benefit charge of £3,590. Yet upsizing to the Peugeot 607 2.0 HDi, which will be taxed at 18% of its £19,395 price because of its 160 g/km of CO2, will face a benefit charge of £3,491.

In real terms this means a 40% tax-payer will save £40 per year by selecting the 607 over the 406, and on top of that, save more money in private mileage fuel costs.

He or she will have to accept that the 406 GTX is better specified than the 607 2.0 HDi, but employees would still have the cache of driving an executive car.

Steve Lambert, fleet marketing manager for Peugeot said: 'Downsizing can be a serious HR issue. Many people don't like it to appear, by the car they drive, that they have been demoted. For some, this will prove the answer.'

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