Fleet News

Boots predicts drivers will ditch cash-for-car scheme

ONE of Britain's biggest high street retailers is expecting a swing back into company cars among hundreds of staff who have opted for a cash alternative.

The prediction comes from Boots, which claims the return of its employees to corporate motoring will also help the environment, because they will be driving newer, cleaner cars.

Boots currently operates a fleet of about 1,700 cars, while about 1,000 people who qualify for a company car have opted for the cash alternative, since the scheme was launched in 1995.

But changes to benefit-in-kind (BIK) tax to a system where drivers pay on a sliding scale depending on the carbon dioxide emissions of their cars has provided a new incentive to opt for company cars.

In many modern cars, emissions are so low that drivers pay tax on the minimum 15% of list price of their company cars, meaning it costs significantly less than if they paid for vehicles on their own.

Boots has briefed employees extensively on the changes to company car tax and many drivers have moved into low emission diesels to cut their tax bills and also reduce the costs of their private fuel.

A spokesman for Boots said: 'Currently, many people are buying older cars or sports cars with their cash allowances, so clearly a move to newer company cars will benefit the environment. Drivers are deciding to move back because they realise the costs of running a new company car are equivalent or cheaper than running their older private cars. They could not afford to buy the equivalent vehicle themselves.

'Their average tax bill for a fully insured and maintained car can be as low as £40 a month for a lower-medium car.

'This would not be possible to match if they were using their cash allowance, so drivers are opting for company cars again.'

The company says the number moving is currently quite low, but that is because drivers are waiting to pay off the finance on their privately funded vehicles. Boots has been focusing on reducing the environmental impact of its fleet for several years. It runs 20 dual-fuel and several electric cars, while cycle couriers are used to transport items between offices at its headquarters.

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