Fleet News

Drivers still ignorant of tax alterations

THOUSANDS of company car drivers are not aware of radical changes in benefit-in-kind tax taking place in April 2002, a new survey claims. The findings come in this year's 'Company Car UK' report from the Monks Partnership which questioned 198 companies running about 130,000 company cars.

It concluded that while fleet managers and other company employees responsible for company car policies were 'well aware' of the changes, only 50% of companies appeared to have formally told their company car drivers.

As a consequence, employees who have changed their company cars in the two years since the CO2-based tax move was announced will be taxed under the existing system and the new regime and could find themselves losing out. In addition, about 15% of companies admitted they were unaware that the 2,500 and 18,000 business mileage discounts were being scrapped from next April. Despite the tax shake-up, company cars 'remain a standard benefit for the majority of senior managers regardless of the size or type of company', says the report.

It adds that the only exception to the popularity of the company car among employees is in the financial services sector and that the salary level at which company cars become an employee benefit vary from industry sector to industry sector. In engineering, the majority of employees earning £20,000 or more have a company car, but in hi-tech companies the majority of staff only receive a company car when they earn more than £30,000. Most companies offer staff a choice of company car with 55% of directors having an open choice subject to a price limit, compared with 32% of sales representatives.

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