Spring Statement Fails to Clarify Future Company Car Tax

The fleet industry has expressed "disappointment" at the failure of Chancellor of the Exchequer Philip Hammond to clarify company car benefit-in-kind tax rates for the next five years.

Fleet managers and company car drivers had been hoping that last week’s Spring Statement from the Chancellor would provide clarity on future tax rates from April 2020, which will be based on cars carbon dioxide (CO2) emission figures obtained under WLTP, which was introduced last year.

The Chancellor merely stated that "in the coming months” the Government would publish its response to its recent call for evidence in relation to its review into the impact of WLTP on company car tax benefit-in-kind tax as well as Vehicle Excise Duty.

The lack of clarity means that fleets and company car drivers continue to have no idea as to what company car benefit-in-kind tax rates will be from 2021/22 as rates have only been published up to and including 2020/21, or if those already announced for 2020/21 will change.

Paul Hollick, chairman of fleet decision-maker training organisation ICFM, of which Martin Evans, Jaama’s managing director is a board member, said: "On behalf of all fleet decision-makers and company car drivers, the ICFM is hugely disappointed that the Chancellor did not use the Spring Statement to bring clarity to company car benefit-in-kind tax from April 2020 and beyond.

"Promising to publish details 'in the coming months' on what is a fundamental issue for all fleets merely continues the uncertainty that is crippling decision-making.

"Government in-decision is delaying the acquisition by fleets of new cars featuring the very latest emission-busting engine technology and, in some cases, driving employees out of company cars and into privately-funded older and more polluting vehicles."