Fleet News

2011 Budget comment: Ernst & Young

Ian Thomas, executive director at Ernst & Young speaks on the latest Budget;


"The increase in tax and NIC free Mileage Allowance Payments for the first 10,000 business miles from 40 pence to 45 pence from 6 April 2011 is welcome news for those who make business journeys in their own cars by softening the double blow of the VAT increase last January and the general rise in fuel prices seen of late. It will also increase the cost efficient funding element so crucial in many Employee Car Ownership arrangements."

Private fuel

"The £800 increase in the private fuel scale charge multiplier to £18,800 will only increase the inefficiency to employers of providing this benefit and may encourage employees to undertake further private milage to 'break even'; by removing the charge thousands can be saved every year. Conversely, the increase in benefit now makes it even more crucial that employers and their employees' mileage records and procedures are sufficiently robust to withstand HMRC challenge as any employees established to have been provided with private fuel could cost employers even more than before from April."

Company car benefit

"From April 2013 the benefit in kind tax rates for company cars will increase by 1% (still subject to the 35% maximum), but the greenest cars are spared - zero emissions still equals zero company car tax, less than 75g/km remains at 5% and below 95 g/km creates a 10% charge - a welcome continuation of the green cars agenda now making the use of eco friendly cars in salary sacrifice schemes an even more compelling planning solution."

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