Fleet News

Low mileage drivers set to ditch cash alternatives to company car

EVIDENCE is emerging that low mileage company car drivers who gave up the perk for a cash alternative are being attracted back to company-funded vehicles. Association of Car Fleet Operators chairman and fleet consultant Tony Leigh claims drivers who travel fewer than 2,500 business miles a year are returning to company cars because they will be winners under the new tax scheme. Currently, drivers who cover fewer than 2,500 business miles a year are taxed on a benefit charge of 35% of the list price of their cars. Under the new system they will be taxed according to the car's carbon dioxide emissions, regardless of business miles. The potential losers - high (18,000+ business miles pa) mileage drivers, - 'are not opting out of company cars in great droves', according to Leigh. 'But they have to be much more proactive in trying to ease their tax situations. Some of these people may give up their company cars or downsize. If it is the former, they will not be able to fund similar vehicles themselves. 'If employees look at opting out of the company car they are having to also look at the cost of insurance, accident management, availability of a relief vehicle and other issues which are all part of a company car package. Similarly, that is why low business mileage drivers remain attracted to company cars.'

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