Fleet News

Government and industry dismiss BIK 'stealth' tax scare stories

LEADING figures in the fleet industry have dismissed claims that the new company car tax is one of the Government's infamous 'stealth' taxes.

The claims were made last week by Tory transport spokesman Malcolm Moss MP, and reported on the front-page of a national tabloid newspaper.

The tabloid warned company car drivers they would face a 'crippling new stealth tax', citing as examples two employees who both currently qualify for maximum tax discounts by exceeding 18,000 business miles a year.

The first driver has a Porsche 911, and the second a Mercedes-Benz CLK430 - neither car is destined to perform well under the new emissions-based tax system next April, but neither is representative of the UK company car parc.

Dismissing the allegations of a stealth tax, Tony Leigh, chairman of the Association of Car Fleet Operators, said: 'The details were announced by the Chancellor of the Exchequer in Budget 2000 and the original news of the change was revealed in 1999.

'The point that has been missed is that the change was made to get people to think about the type of car they drive. We have encouraged fleet managers from day one to get the information to their drivers as early as possible, and drivers have had sufficient time to prepare and look at the choice of cars and to encourage them to go for a more environmentally friendly option.'

Mary Braim, Inland Revenue adviser on employee benefits, also rebutted the claim that the change was a stealth tax: 'It was announced three years in advance, and the Exchequer stands to lose money on the scheme during the first two years, but Ministers believe this is a price worth paying because of the environmental benefits.

'We are at a loss to understand why the newspaper would put a three-year-old story on its front page. Nothing has changed since it was announced.

'We think about a million company car drivers will be better off under the new system with no behavioural change, and some of the others have already started at looking at other cars which is what Ministers hoped would happen.'

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