Fleet News

Fleet fury over tax errors by Revenue

FLEET decision-makers have reacted furiously to errors at the Inland Revenue that led to hundreds of thousands of drivers potentially receiving the wrong tax codes.

Last week, Fleet News revealed that almost 200,000 drivers may have received incorrect tax codes despite their employers supplying all the relevant fleet carbon dioxide emissions data requested by the Inland Revenue.

In addition, more than a million and a half company car drivers have received tax codes based on Revenue estimates of the CO2 emissions of their cars. But the Revenue failed to advise many of these employees to check their car benefit charge and did not provide them with the information required to calculate their correct company car tax.

Fleet executives have reported that their company car drivers' tax codes for 2002/03:

  • Have all been based on 15% of their cars' list prices.
  • Have all been based on 35% of their cars' list prices.
  • Have included defunct business mileage tax breaks.

    Via its website the Inland Revenue has issued an apology for the computer error that saw it fail to use car CO2 data supplied by employers in calculating tax codes for the next financial year.

    It has also apologised to company car drivers for leaving out a vital notice warning them their tax code was based on an estimate, in cases where employers did not supply CO2 information.

    The Revenue has now promised that: 'Revised coding notices using the information already given to us will start going out to company car drivers in the next few weeks and everyone should have received one by the end of March.'

    This has not satisfied the Association of Car Fleet Operators which has complained to Chancellor of the Exchequer Gordon Brown about the error and warned all its members to check their drivers' tax codes.

    Tax advisers Ernst & Young warned of this potential chaos back in May 2001, claiming the project was hamstrung from the start by the Inland Revenue's decision to make the supply of CO2 information a 'voluntary process' for employers.

    Alastair Kendrick, tax director at Ernst & Young, added that an employee's tax return and P11D do not contain enough information for drivers to calculate their tax liability, because they only list a model and its list price, not its carbon dioxide emissions.

    'A lot of drivers will not know where to go to get this CO2 information and employers will have to help them,' he said.

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