Fleet News

Move Your Fleet Online: emissions tax scrapped by 2010?

CARBON dioxide-based company car tax could be scrapped after 2010 in favour of a new mileage-based taxation system relying on telematics systems and tracking technology, fleet decision-makers heard at a major conference.

The claims were made at the Fleet News and Fleet NewsNet Move Your Fleet Online conference last week, sponsored by Inchcape Fleet Solutions and held in association with the Chartered Institute of Purchasing and Supply.

In a session called Staying in Touch, on the present and future applications of telematics, Roger King, chief executive of the Road Haulage Association, said: 'Distance-based charges will be introduced on 500,000 lorries by 2005 and you can be certain that if the scheme is a success then you will see a similar one being introduced on company cars after 2010.'

He added: 'After four years of trialling the system on HGVs, the Government should be ready to install the same technology on the motor car, so be warned.'

If the Government adopted such a scheme, it would signal a step back in time, as the current carbon dioxide-based system, which taxes company cars by a percentage of their price according to the emissions they produce, replaced a mileage-based system. Until 2002, company car drivers paid tax on 35% of their car's taxable value, with discounts if they reached specific mileage limits.

However, this led to claims that motorists were being encouraged to rack up unnecessary business miles to achieve valuable tax breaks. John Wright, managing director of Amatics, revealed fleets were already benefiting from telematics systems. It fitted a system to Transco's 5,800-vehicle fleet and achieved a fuel bill reduction of 10%, more than enough to pay for the cost of installing the system.

A spokesman for the Inland Revenue said there were currently no plans to move away from the current emissions-based taxation system.

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