Fleet News

Tax ignorance still rife among small fleets

DIRECTORS of small companies are either ignoring the tax impact of their company car choices or are unaware of the details of the new carbon dioxide-based company car tax next year, latest research reveals.

Analysis of the most popular company cars for small fleets shows many businesses have yet to make adequate plans for their senior management, with demand for luxury and high performance cars still remaining high, according to small fleet specialist KeyFleets.

Senior employees may be deciding to drive the car of their choice and face the tax consequences. But their actions go against the grain of a market in which a growing number of fleets are ordering low emission models to reduce driver tax bills under the CO2-based company car tax system.

KeyFleets examined its database containing details of the 30,000 cars and light commercial vehicles supplied to customers with sub-100 fleets for the survey. Vincent St Claire, KeyFleets' managing director, said: 'Despite all the publicity about CO2 taxation, expensive, high-performance vehicles are still seen as a necessary perk of the job by many directors.

'Individual tax bills could increase to anywhere between £4,000 and £7,000 if they are high-mileage drivers covering more than 18,000 business miles a year, but it seems that many directors will only realise this when they check their pay statements in the new financial year.'

KeyFleets conducted a survey of 300 owners or directors of companies with annual turnovers between £50,000 and £1million. It found that three quarters of the smallest businesses and more than half of those within the £500,000 to £1million turnover bracket have taken no action.

St Claire added: 'These are very worrying figures. Vast numbers of company car drivers are heading for significant tax increases that their employers have done nothing to prevent.

'Ignorance is no defence because the vast majority of the companies surveyed are not large enough to employ a full-time fleet manager. This means responsibility for addressing company car-related issues lies with senior management.'

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