Drivers’ ignorance of benefit in kind tax charges is proving a boost to the taxman.
Nearly half of company car drivers (46%) company car drivers do not understand the benefit-in-kind tax changes.
Almost a third of drivers did not realise that there had been changes to the way company cars impact upon taxes – and 59% think company car tax is based only on the cost of the car.
Independent car specialists OSV has discovered that around half of all company car drivers don’t really understand what their vehicle means for their tax status.
OSV co-director Andrew Kirkley said: “The one million company cars in Britain present an big opportunity for the taxman to fill his coffers when inappropriate choices are made.
‘In opting for a vehicle with lower emissions you’re not just doing a good thing for the planet, but you could also be boosting your bank balance.
“If your company is willing to give you a say in the choice of car you drive for business, it’s well worth shopping around and weighing up all of the options.
“A company car may be an opportunity to get behind the wheel of a vehicle you couldn’t normally afford, but there’s nothing to say that the vehicle must be a gas-guzzler.”
While 27% of company car drivers did not realise there had been changes made to the way in which company cars impact upon taxes (with the April 6 implementation of the BIK system) of those who did know that changes had been made, almost half (46%) had no idea what those changes were, over four months after the changes came into effect.
BIK represents any benefits which employees or directors receive from their employment but which are not included in their salary or wages, and the company car is potentially the greatest of these assets.
OSV’s research also revealed that 47% of company drivers do not even know what BiK stands for, let alone how it impacts upon them, or how to calculate it.