Fleet News

Tax change sparks 'fleet rethink' call

FLEETS should scrap the traditional definition of company and private cars and focus on flexible transport policies, companies are being warned.

The new benefit-in-kind tax system has made single solution fleet policies obsolete and now anybody driving on business in any vehicle, no matter how it is funded, should be considered part of the fleet manager's responsibility.

Executives at Daimler-Chrysler Services Fleet Management (DCSFM) say changes to the BIK rules in April turned the fleet market on its head, as thousands of drivers saw their tax liabilities altered.

Rael Winetroube, DCSFM's sales and marketing director, said: 'We are recommending to customers that all their employees who have a need to drive on business should be considered part of the fleet, whether they are provided with a conventionally funded company car or are technically responsible for their vehicles via personal finance.

'Meeting company needs with a single solution now means applying perhaps two or three funding options in a coherent way rather than imposing a single package.'

DCSFM has been working with its customers to see if they need to readjust their policies to include cash-for-car, or provision for downsizing, in order to ensure employees are not being unnecessarily hit by the new tax.

Winetroube added: 'While we applaud the environmental objectives of the new BIK system, its effect has been profoundly unsettling on many business-users, notably those who drive more than 18,000 business miles a year and have found themselves penalised under the new system.

'The options for them to mitigate the rise in their tax bills are normally to downsize or to move into a personal finance scheme. These can be difficult decisions to make.'

  • What do you think? Email fleetnews@emap.com
  • Leave a comment for your chance to win £20 of John Lewis vouchers.

    Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

    Login to comment


    No comments have been made yet.

    Compare costs of your company cars

    Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

    What is your BIK car tax liability?

    The Fleet News car tax calculator lets you work out tax costs for both employer and employee