Fleet News

HMRC is asking fleets for help

Government tax officials are to ask delegates at the Fleet News Risk in Fleet conference next week to help them thrash out policy on employee car ownership schemes in an exclusive and groundbreaking debate.

And in order to give the hundreds of fleet managers plenty of thinking time on ECO schemes and how they interact with company car tax and mileage payments, Her Majesty’s Revenue & Customs (HMRC) has published its three most likely scenarios for the first time today.

Policymakers stress that while the scenarios do include specific rates and thresholds, they are used for illustration purposes only, although comments are welcome.

In a bid to make the transition as easy as possible for fleets, tax officials are also seeking views on the administrative burden likely from any changes.

A decision on the future of ECOS is eagerly awaited by industry and was expected to have been made in this year’s budget, but further review was deemed necessary.

An HMRC spokesman said: “HMRC is continuing its review of the taxation of employee car ownership schemes and the interaction with company car tax and mileage payments.”

HMRC is looking at three options. One is whether the rates and threshold can be adjusted to better reflect differing costs of drivers using their own cars for business.

The second is changing the structure to encourage drivers to be more environmentally aware and the third looks at aligning the tax and NIC rules for mileage payments.

Fleet News editor Martyn Moore said: “The fact that HMRC has chosen a Fleet News event to discuss and then set policy is a huge endorsement of the Fleet News brand. They have recognised the wisdom and influence of the Fleet News audience.”

The event takes place on Tuesday (May 15) at the National Motorcycle Museum in Birmingham.

Those unable to attend can email their views to fleetnews@emap.com. We will forward them to HMRC and try to get them included in the conference discussion.

Scenario 1

Linking AMAPs to CO2 emissions:
Given the interaction between company cars, ECOS and mileage payments highlighted by the review so far, a possible approach would be to link the AMAP limits to the CCT lower threshold. An example of how this could work would be:

 

  • 50p per mile for cars within the 15% company car tax band or lower (currently 135g/km) up to 10,000-mile threshold.
  • 40p per mile for cars within 16%-25% band (currently 140-185g/km) up to 10,000 miles.
  • 25p per mile for cars over the 25% band; all cars with no CO2 emissions and all cars over 10,000 miles.

    Scenario 2

    Amending the rates and thresholds:
    Amend rates and thresholds to better reflect differing needs and costs of drivers using their own cars for business mileage. The following amounts are illustrative only but give an idea of how the current rates could be changed: One option might be:

     

  • 50 per mile for 1,000 miles.
  • 40p per mile for the next 5,000 miles.
  • 25p per mile thereafter.

    Another might be:

     

  • 50p per mile for 2,000 miles.
  • 40p per mile for the next 4,000 miles.
  • 20p per mile thereafter.

    Scenario 3

    Combining the two suggestions for a more composite approach linking both environmental issues and more:

     

  • 55p per mile for cars within the 15% band or lower up to 5,000 miles.
  • 40p per mile for cars within 16%-25% band up to 5,000 miles.
  • 25p per mile for cars over the 25% band; cars with no CO2 emissions and all cars over 5,000 miles.

     

  • Anyone wanting to join the debate but unable to attend next week’s conference can email their view to pa.harris@hmrc.gsi.gov.uk by July 31.

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