Shaun Barritt's blog: Company car drivers could be in for a shock
30 October 2017
Shaun Barritt, CEO at Grosvenor Leasing talks about why some company car drivers may be horrified to find they're paying a lot more than they were previously.
I read with interest a survey by OSV that more than a quarter (27%) of company car drivers are not aware of the tax changes introduced in April this year.
Reported in Employee Benefits magazine, it went on to say that of 527 company car drivers surveyed, 46% who are aware of the changes do not know exactly what they mean.
I'm not surprised by these statistics at all, and welcome the report which highlights a worrying situation for employees with vehicles.
Many drivers, I'm sure, will wake up one day and be horrified to find they're paying a lot more than they were previously. The same will be the case for other drivers who've ignored all of the warnings about choosing higher emission vehicles and will see their tax liability rise.
Lets face it, costs are going to increase for those not heeding to the green agenda. In 2014/15 a sub-130g/km petrol car was deemed green enough to attract an 18% petrol banding. By 2020/21, it will be up to 30%. A sub-100g/km band car was only 12% in 2014/15 and will be 24% by 2020/21. And whilst the tax modifications announced in April are relating to BIK for drivers opting for salary sacrifice and cash schemes, the green agenda is apparent here also as cars with sub 75g/km emissions won't be affected.
Okay, I'll admit that it's not everyone's cup of tea to immerse themselves in taxation. Yet, you don't have to understand the financial ins and outs to see that the Government agenda is crystal clear. Penalties for drivers, and companies, of not going green are increasing sharply and when the Government decides to enforce change through a carrot and stick approach, it's wise to take the carrot rather than wait for the stick!