Fleet News

Company car drivers still in the dark

Confusing road signs stock image

A cabinet reshuffle has seen transport minister Jesse Norman move to Treasury. He’ll be missed by many as he made the motor industry one of his priorities.

Whether it was road safety charity Brake, environment body Go Ultra Low or our own sister conference Smart Transport, he was active, lending his presence to numerous events. Michael Ellis now takes the DfT role.

With Prime Minister Teresa May announcing she will step down on June 7, fleets and drivers have been thrown into further turmoil.

A leadership contest could last two weeks – or two months. It’s likely to be closer to the former due to the uncertainty of Brexit.

That still moves us towards the end of June, dangerously close to the next scheduled Finance Bill. Remember, we were expecting to hear this month about the Government’s response to the WLTP consultation and any action Treasury would take to adjust company car tax thresholds and VED rates (although we expected no change to the latter).

All the evidence is in and we are still expecting a decision before Parliament breaks for the summer recess on July 20, as any further delay would not give HMRC enough time to implement any changes.

However, it still leaves company car drivers choosing their next model without any knowledge of what they will be paying in benefit-in-kind tax past March 2021, in other words before the end of the second year. 

With many on a four-year replacement cycle, increasing numbers are choosing to take the cash option instead. This puts future tax revenues at risk, surely increasing the pressure on Treasury to act quickly.

However, if you can persuade your drivers to keep their cars for a little longer, a clearer picture should emerge within the next six weeks or so.


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  • rosco7 - 31/05/2019 09:57

    Unfortunately, the Treasury is still congratulating itself on increasing revenue from company car BiK, for effectively doing nothing. I have tried to tell them in detail that the number of cash takers will be detrimental to Tax receipts going forward, unless they expect the final people still in a company car to pay millions in BiK tax to offset those who have taken cash. A completely new tax system is going to be required for company cars going forward. The CO2 taxation method has now run its course. We need a more accurate way of quantifying the value of a company car, with room to enable government to incentivise companies to provide more efficient and lower polluting vehicles. I for one would be happy to work with the Treasury, but these offers haven't been taken up. Perhaps once Brexit has been resolved one way or another, there will be more interest. But I doubt the "perk" company car will last that long, and the "job need" company car will surely succumb to employees not wanting to pay extortionate tax for relatively modest benefit value.

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