Chancellor overlooks company cars in statement

Fleet industry leaders say that company cars have been overlooked by Chancellor Alistair Darling in his pre-budget statement.

Although the industry has made significant improvements in its environmental performance, accountancy firm PricewaterhouseCoopers says it is surprised not to see any definitive new announcements on company car policy in relation to capital allowances and CO2 emissions.

There are, however, a number of changes that were previously announced which take effect from April 6, 2008.

These include a new starting point for the new 15% band for CO2 based taxation which will be reduced to 135g/km and the introduction of a new 10% band for cars with a CO2 of less than 120g/km.

Technological improvements by manufacturers mean there are a number of cars available below the 120 g/km level, although many of these will still be subject to the three per cent diesel supplement.

This means that a £10,000 company car can be offered to an employee for only £200 in tax per year.

PricewaterhouseCoopers tax director, Gary Hull, said many companies are starting to realise that offering company cars to all employees - not just those who need them for work, - is perceived by staff as a valuable benefit.

He added that these cars will also be maintained, repaired and insured through the arrangements, which is attractive to both employer and employee.