LETTERS to Fleet News’ editor Martyn Moore.

New BIK tax on vans – the devil’s in the detal

SIR – I read Trevor Gelken’s guest opinion piece ‘Is your fleet ready for van tax changes?’ (Fleet News, April 27) with interest.

We can’t currently plan for the changes in van tax as no-one appears to know how the new regulations will work in practice. How aggressive will HM Revenue & Customs be in its assessment of private mileage? I believe every van actually does private mileage. For example:

  • A driver stops on the way home to pick up the shopping.
  • Driver pops out to get lunch.
  • There is an emergency in the middle of the night and he takes a relative to hospital.
  • A friend asks him to move a sofa at the weekend.
  • Very occasionally he takes a child to school.

    We have a fleet of 200 vans. I am confident that we can manage the fleet so that 90% of use is business or driving to and from work.

    I don’t think anyone can guarantee that their vehicles are never used for any private use in any circumstances. We need to know the detailed guidelines that HMRC will use.

    Will it accept a small level of private mileage? ie will it work to the spirit of the regulations?

    Otherwise we are taking a large gamble that an inspector will seek to recover a huge amount of tax and national insurance. This puts us in a huge quandary. Do we assume private mileage and a £3,000 benefit-in-kind tax loading which could make us uncompetitive and possibly lose contracts?

    Or do we take a gamble on HMRC being unreasonable and imposing a charge somewhere along the line? I hope the boys in Whitehall will actually listen to the industry and come up with a 90/10 split of business to private. The devil is in the detail.

    John Scott
    Group finance director, Carter Thermal Industries

    SIR – I must address one point in Trevor Gelken’s guest opinion piece. I have to disagree with his view that the forthcoming BIK charge rate of £3000 on vans ‘isn’t really a bad deal’.

    It seems to me that the new rate is most unfair to van drivers.

    Many vans are vastly inferior to cars when it comes to private use, taking the family out for example.

    In view of this, I fail to see why van drivers should be required to pay the same, or more tax than a company car driver.

    Mike Clayton
    Fleet manager, Garndene Communication Systems, Huddersfield

    TG: the £3,000 BIK charge which comes in to force in April 2007 is in fact a loading on the employee’s tax bill, so drivers will only have to pay either 22% or 40% of that figure per year. For a 22% taxpayer, this equates to £660 per annum.

    Congestion on purpose

    SIR – I refer to the article ‘Road congestion is a deliberate ploy, claim fleets’ (Fleet News, April 27) which reported on the North West regional meeting of Acfo. In particular, I would comment on the suggestion of engineered congestion, with which I would tend to agree.

    I regularly use the A456 and A38N into and out of Birmingham and both of these highways have traffic light-controlled junctions with lanes that reduce immediately afterwards.

    Apart from the starting grid effect, it is also noticeable that one does not get green lights in any sequence.

    I have never been able to establish the logic of widening a two-lane highway to three lanes just before the lights and reducing back to within a hundred yards or so afterwards.

    Alan D Crowhurst
    Cleobury Mortimer, Shropshire

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