Pre-Budget Report 2009: Company cars tax perk to return

Chairman of the Tax Advice Network, Mark Lee predicts that at least one PBR announcement will lead to behavioural changes.

The chancellor announced that employees and directors who are provided with an electric powered company car for their private use will pay no tax on the benefit from 2010/11 through to 2014/15.

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Comments

Disagree

Anonymous | | Permalink

This statement is rather contradictory.

Employees who qualify for a 'perk' company car are typically the more senior employees. In my extensive experience, the vast majority of these senior employees do not worry too much about the tax cost of their company car for 2 reasons:

1) The car is seen to be status symbol, i.e. it is a gauge of how senior/how successful they are

2) These employees tend to earn reasonable salaries so paying a few extra £hundred or £thousand isn't going to put them off selecting their plush new Beemer or whatever.

 

It is clearly obvious that an underperforming, unglamourous and downright impractical electric car is never in a month of Sundays going to persuade the vast majority of these senior employees away from their traditional company cars, even if there is no tax cost. The reported comments have therefore no substance at all.

 

 

to the above

Anonymous | | Permalink

It can certainly be beneficial for middle managers who are not so keen to show off ! 

Don't sugar it, Anonymous.

chatman | | Permalink

Stop trying to protect people's feelings and say what you really think.

Could be of interest

markgosling | | Permalink

Could be of interest to sole directors of  small company such as myself.

What about the practicalities

Anonymous | | Permalink

I agree on egos sometimes getting in the way of sensible decisions. But what about the practical limitations on electric cars ?

Many of the current ones can only do a hundred or so miles before needing recharged. Even if a charging station can be found (it's not like a mobile phone that can be plugged in anywhere), there is quite a long time to wait before being fully charged again. Now, who on earth wants that sort of inconvenience ?

There is also performance to consider. Fair enough if you are a driver who is quite happy tootling along at < 50mph on a motorway it may be for you (although it would have to be a short motorway journey !!). But for those that prefer slightly faster (but within speed limit) driving, it would be very frustrating to be driving an overpowered hairdryer.

With the best will in the world, unless electric cars are of a similar standard and practicality of traditional cars very few people, other than your those of the most greenest of peruasions, will ditch their normal cars for these glorified milk floats.

Bottom line is it is a good idea in theory but never going to work, at least in this decade anwyay.