Tax rises threaten company fleets
Businesses may abandon company car fleets in favour of cash allowance schemes on the back of proposed changes to the benefit-in-kind (BIK) tax system, according to a leading accountancy firm.
Chancellor George Osborne announced a tightening of BIK tax rates in April 2015 during this year's Budget, which also spelled the end for special tax breaks on electric and low emission cars.
With tax bills on company cars likely to rise, that will have consequences for the future of fleets, KPMG tax partner Harvey Perkins said.
He added: "We could see a shift away from company cars, including those funded via salary sacrifice, if the new rules are introduced."
The British Vehicle Rental and Leasing Association has drawn up a Business Car Taxation Taskforce to devise lobbying strategies and arguments against the tax changes.
Chief executive John Lewis said: "Tax incentives for reducing fleet emissions have worked too well and the Government is worried about falling revenues. But these measures are ill-advised, unfair and over aggressive."
published: 04/09/2012 17:00:01