Fleet News

Two years of planning helps soften the blow of new tax system

LONDON-based insurance company St Paul International Insurance has found preparing for the introduction of the new carbon dioxide-based company car tax a seamless affair, thanks to hard work and early preparation.

Fleet manager Deanne Rhodes is responsible for a fleet of 120 vehicles run on contract purchase with Interleasing and Lex Vehicle Leasing. She began preparing for the introduction of the new carbon dioxide-based company car tax regime when details were announced in March 2000.

Drivers were issued with a detailed explanation of how the company car tax system was changing and how it would affect their individual tax bills. A new car list was issued to drivers detailing vehicles' CO2 emissions.

'Drivers were also given the opportunity to have a one-to-one session to discuss the changes to benefit-in-kind. Moreover, they know I'm only a telephone call away,' she said.

This support has continued throughout the run up to introduction of the new tax system and drivers are e-mailed useful information on all aspects of company car driving.

Rhodes is encouraging her high mileage drivers to make the switch from petrol to diesel-powered vehicles because oil-burners typically have lower CO2 emissions than their petrol counterparts and consequently should help minimise a driver's tax bill - despite the 3 per cent penalty on diesel vehicles.

Rhodes said: 'We have done everything we can to lessen the blow for our high mileage drivers. Even if they move in to a low-emitting diesel vehicle, they will still be worse off because they will go from paying 15 per cent to 18 per cent.

'However we will be looking to mitigate the impact of the changes to benefit-in-kind through the business mileage rates we pay, but only about 15 drivers will be adversely affected by the new tax regime. As a matter of policy we are not providing monetary compensation.'

Rhodes added that the prospect of the new tax regime is encouraging low-mileage drivers to stay in the company car scheme.

At the moment, Rhodes is not encouraging drivers to switch to liquefied petroleum gas. 'Unfortunately, I don't think that LPG has the necessary infrastructure to support the needs of our drivers who travel tens of thousands of miles a year and who are based all over the UK.'

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