Company cars & tax: a growing concern
Fleet decision makers feel that taxation will become a more important issue in influencing company car decisions over the next year.
GE Capital surveyed 300 fleet decision makers on the factors that are influencing decisions now, and what they think will impact in 12 months’ time.
Respondents were asked to score a list of factors out of 10, resulting in the “driver and corporate taxation” option as the fourth most important. It also showed an increase of 0.5 over the next year from a mark of 6.7 up to 7.2.
The taxation of company cars has had a significant impact on the fleet industry and a number of changes affecting businesses were announced in the Budget 2011. AccountingWEB tax editor Rebecca Benneyworth provided an overview of business motoring back in March.
Those using their own cars for business journeys benefited from an increase in the main Authorised Mileage Allowance Payments per mile from 40p to 45p from April 2011. The tax rates applied on employees provided with a company car that is also available for private use will pay 1% from this year (depending on list price and the CO2 emissions of the vehicle) up to the maximum 35% rate. The table on which the benefit is calculated will be lowered to 10% of list price from the current 15% starting from next April.
Yet in spite of the slightly more favourable treatment for people using their own cars, the GE Capital survey found that the percentage of companies offering “cash for car” arrangements has fallen from 36% to 25% in the last two years.