Fleet News

Drivers not getting enough tax advice

Three in every five drivers do not feel they are being given all the facts by their employer to help them save money when choosing a company vehicle.

But, while 65% of drivers claim they are being kept in the dark, 77% are aware of the correlation between CO2 emissions and how much tax they pay, according to a Lex Autolease survey.

“We still find that many company car policies do not explain the tax implications to employees,” explained John Webb, associate director of Lex Autolease’s consultancy team. “This might be down to a lack of experts within the company or policy development not being joined up so that HR and finance are aware of the issues.

“Either way it comes down to how well a policy is framed and how well it is communicated – education is key.”

He added: “Even when they are aware they are not changing policies when changes are announced in the budget, resulting in people making choices based on outdated information.”

Worryingly, the survey also revealed that 33% of respondents said that their company did not provide a wide choice of low-emitting vehicles to choose from.
Webb explained that, with such a close correlation between CO2 emissions and fuel economy, employers and employees risked being left out of pocket through high prices at the pumps, as well as being stung by paying a higher rate of tax through Capital Allowances.

That restriction in choice could be down to 72% of fleets now only offering a single badge or limited range of vehicles to their employers, according to the latest company car trends survey from GE Capital’s Fleet Services.

The figures suggest that as businesses across the UK have been forced to focus on cutting costs during the recession their employees are being offered less choice as a result.

“We believe that all fleets should understand their total cost of ownership, not just the lease rate, and work with their partners to set policies to optimise operational efficiency while minimising cost,” said Gary Killeen, UK fleet commercial leader at GE Capital.

For best practice and legal advice, have a look at the fleet news legal section for more information.

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