Fleet News

Company car market is stable despite scare stories, says Fleet Alliance Group

Martin Brown, Fleet Alliance

A desire for sensationalism is masking the currently stable state of the company car market, says Fleet Alliance Group.

Latest figures from HMRC suggest the number of company car drivers fell 5% to 890,000 between the 2016-17 and 2017-18 tax years, with many headlines claiming a dramatic decline in the sector.

However, as previously reported by Fleet News, tax officials say that initial analysis suggests a new way of reporting company car tax may have skewed the figures.

Martin Brown, managing director of Fleet Alliance Group, said: “It’s important that the media takes a balanced view of such important statistical information.

“The number of company cars has remained consistent despite repeated stories about its demise and the talking up of alternatives that sidestep benefit-in-kind company car tax.”

HMRC figures show the number of employees paying benefit-in-kind tax on the P11D value of cars had fluctuated between 940,000 and 950,000 since the 2010-11 tax year.

Fleet Alliance Group said while the drop to 890,000 in the latest figures sounds significant, HMRC stated in an explanatory paragraph that:  “Figures for 2016-17 and 2017-18 do not include any estimate of the impact of voluntary payrolling. Initial HMRC analysis suggests that this accounts for a significant proportion of the decline in reported numbers.”

Voluntary payrolling was introduced in 2016 to ease the reporting burden of BIK for a host of benefits, with employers moving away from submitting P11D returns to collecting tax on company cars through payroll.

This changed from 2017-18, when employers were able to provide more detailed data about the cars being provided through their FPS (Full Payment Submission). But, HMRC says that providing this data was not mandatory until 2018-19.

HMRC said that this had “implications for the longer-term viability of these statistics,” but added it was working on a way to reconcile voluntary payrolling with its current P11D statistics for the 2019/20 tax year.

However, Brown said uncertainty over future taxation, limited availability of ultra-low emission vehicles and a decline in diesel vehicle popularity had destabilising influences on company car decision-making.

He said: “Nevertheless, HMRC statistics suggest the company car remains a stable benefit, a fact reflected in our own managed fleet which has grown during the year to 37,000 vehicles.

“We believe the company car will continue to play a significant role as we move towards greater electrified vehicle availability.”



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  • Ashley - 06/08/2019 13:05

    Let's be honest - voluntary payroll reporting doesn't account for this difference - we've seen an increasing trend of Perk users moving to cash, increased complexity around OpRA, reduction in the benefit of salary sacrifice etc - I believe the true numbers would be around 920k but there will still be a decline.

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