Fleet - Benefits - On The Road Again.

(From Financial Director)

Byline: Anthony Harrington.

One of the government's frequently stated aims is to get us all to use our cars less and public transport more. So it should follow, then, that the government would push to get people out of their cars and on to public transport to reduce the adverse environmental impact of vehicle emissions and motorway construction.

One reasonable step toward reduced car usage would be a sustained attack on the company car through the tax system. After all, fleets account for at least 40% of all new cars sold in Britain each year. So it's only logical that there should be a reduction in the number of cars on the country's roads once the company car is no longer a perk.

But far from taxing drivers out of company cars, the CO2 emissions tax basis for assessing benefit in kind taxation is actually bringing company employees back to the company car. Low mileage drivers actually end up paying less tax under the new regime than they would have under the old one, provided they choose low emissions vehicles. The emissions regime, in other words, is a company car-friendly tax policy.

This may leave some members of Friends of the Earth scratching their heads in amazement at what seems like a disconnect in government thinking, despite Tony Blair's famous slogan about 'joined-up government'. However, Stuart Walker, a spokesperson for vehicle leasing company LeasePlan, observes that the company car phenomenon ...