Government stepping ‘fine line’ on tax as company car demand drops

THE Government has to walk a fine line when setting emissions-based company car tax, according to John Lewis, chief executive of the British Vehicle Rental and Leasing Association.

 

His comments came in the light of new figures from HM Revenue and Customs which revealed that the number of company cars on the UK’s roads had dropped to 950,000 in 2010-11 (Digest: August 2).

 

Lewis said: ‘The current tax is clearly having some negative environmental side effects if it is resulting in people opting to use their own, older and more polluting cars in order to do their private mileage.

 

‘What these benefit-in-kind figures tell us is that the company car tax regime is beginning to tax some people out of private use. More people are deciding not to take a perk car or are only using company cars for business mileage. Others are paying a personal use contribution to their employer instead of paying benefit-in-kind tax.’

 

However, he added that despite the figures from HM Revenue and Customs, the BVRLA was not seeing a decline in the popularity of business cars.

 

Lewis said: ‘You only have to look at our own BVRLA member fleet sizes, the Society of Motor Manufacturers and Traders’ figures for fleet registrations or the Government’s own forecasts to see that the number of business cars has increased over the past three years and that they will continue to increase in the years ahead as the economy pulls out of this latest recession.’

 


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