Senior tax partners and opt-out providers claim the proposal to bring down the rates will not persuade more drivers into company cars, but will instead make employees who have to use their own cars for work worse off.
Nick Sutton, chairman of Provecta Car Plan, which provides alternatives to the company car, said: ‘ACFO has missed the point completely. Penalising the 3.5 million drivers who use the AMAPs system is not the way to get more people into company cars. The majority are key workers – public servants who need a car for their work, but who do not have access to any kind of company car.’
Alastair Kendrick, tax partner at Wilder Coe chartered accountants, believes reducing the rates will encourage employees into smaller cars that may not be fit for purpose.
He said: ‘I cannot believe that there is an attempt to try and revise down the rates. It is a fact that the majority of employees who use their cars on business are out of pocket if they are reimbursed in line with the official rates.’
Last week, ACFO called for the rates to be lowered from 40p per mile for the first 10,000 miles to a lower figure more like the 4,000 miles previously used until 2002.
It said the current rates were too generous for high mileage drivers, encouraging them to drive longer distances and choose larger, less fuel-efficient cars. However, Sutton moved to scotch claims that opting out meant employees chose gas-guzzling cars.
He said: ‘I am happy to set the record straight by saying that the reverse is true. By putting employees into a car that they own, the ‘ethic of ownership’ encourages drivers to choose economical cars and our experience has shown that they then drive fewer miles and have fewer accidents than their company car driving counterparts.’