Fleet News

Third of firms unprepared for new CO2 tax

HUNDREDS of company finance directors and their managing directors have yet to assess the impact of the new company car tax regime on their firm's finances, which is launched in just four weeks.

Although drivers have been the main focus of attention during years of preparation for some of the biggest tax changes in the history of fleet, the rise and fall in their tax bills could drastically affect employer's Class 1A National Insurance Contributions.

Fleet consultancy Fleet Logistics discovered the heads of 63% of companies felt they had sufficient information about the changes, leaving nearly one-third admitting they were still unprepared.

But when asked whether their company would be better or worse off because of the new carbon dioxide-based tax system, more than a third did not know. In the Midlands, the 'don't knows' rose to 55%.

Nationally, just 18% thought they would be better off, despite in-depth research having revealed that most company car drivers should see their tax bills fall, pushing NIC bills down as well.

Graham Rees, Fleet Logistics UK business development director, said: 'This does not bode well for the health of fleets. If you don't know where you stand, you cannot review the business properly and you cannot plan properly.

'Effective and regular reviewing and planning should be the most important activity for a fleet. These changes have provided an excellent opportunity for every firm to review and re-organise their fleet.'

Rees said there was a common misconception among many firms that they were simply at the mercy of Government policy and other external influences, discouraging them from attempting to actively manage the effect of the new system.

He added: 'No driver will thank their financial director if their tax liability increases because the company has failed to introduce effective policies.'

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