Fleet News

Last chance for fleets to influence company car tax consultation

Row of parked cars

Fleet News has joined forces with British Vehicle Rental and Leasing Association (BVRLA), fleet representative body ACFO and other industry stakeholders to call on fleets and their drivers to make representations to Government as it reviews company taxation rates.

The Government consultation, announced last month, is assessing the impact of the new fuel testing regime WLTP on company car taxation rates. It closes on Sunday February 17.

The Government has already indicated that doing nothing to recalibrate the tax bands is an option being considered, as it “could have a positive impact in helping to achieve our climate change and air quality targets”. It would see benefit-in-kind tax rise by £20-30 a month for many basic rate taxpayers as higher CO2 emissions push cars into higher bands and could land the Government a tax windfall in excess of £500 million.

Fleet News understands that Treasury has received extensive representation from the environmental lobbyists, but very little feedback from fleet operators and their drivers.

Now, key stakeholders are urging fleets and their drivers to act, before it is too late. The BVRLA has set up a page on its website outlining the issues with a simple form for companies, drivers and other fleet sector parties to complete. This will then be sent to Treasury ahead of the consultation deadline. Click here to fill in the form.

Treasury officials have previously indicated to Fleet News that they are sympathetic to the effect WLTP could have on company tax taxation. They have also reacted positively to suggestions that further rises to BIK could result in drivers opting to take a cash allowance rather than a company car which would be used to buy an older, more polluting used car.

This could not only prove detrimental to the Government’s Road to Zero aspirations, but would also result in a rise in the grey fleet which potentially increases risk for employers and costs through the payment of AMAP rates for fuel reimbursement.

A reduction in new car sales caused by a trend towards opt outs could also further damage a car industry already under attack from the uncertainty caused by Brexit and a global slowdown in demand. In the past year, Vauxhall has announced almost 250 job losses at its plant in Ellesmere Port, Jaguar Land Rover 4,500 globally, and Nissan has axed plans to make the new X-Trail at its Sunderland plant.

To read the evidence submitted by Fleet News to Treasury ahead of the Chancellor’s Budget in October and the forthcoming Spring Statement, including video interviews with fleet managers about the likely impact on their drivers of taking no action, click here.

What do we want to see?

  • Changes to the BIK tax and VED rates to reflect the impact of WLTP on CO2 emissions
  • Four- or five-year window to future BIK rates to give clarity and certainty for fleets and company car drivers

Both were part of last year's Fleet News Budget Manifesto campaign. It is now crucial to keep applying the pressure to the Government and to local MPs in the lead up to the Chancellor's Spring Statement on March 13.

Vote in our poll

Are you seeing more people take cash due to WLTP/BIK uncertainty? Vote by clicking here.

 

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