Error parsing XSLT file: \xslt\FacebookOpenGraph.xslt Owner-drivers "will decline" under skimpier AMAP rates
Cookies on Businesscar

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time

BusinessCar magazine website email Awards mobile

The start point for the best source of fleet information

Owner-drivers "will decline" under skimpier AMAP rates

Date: 05 October 2007   |   Author: Nick Gibbs

Likely Government scrimping of the advisory fuel rates will force fleet managers to rethink their policy on employee-owned cars.

That was the prediction of tax expert David Rawlings of Deloitte, who told an audience of fleet professionals at last week's BusinessCar Live he's expecting the AMAP windfall to end from the 2008 Budget.

"At that point there has to be an argument for putting people driving over 10,000 miles a year back into the company car market," Rawlings said. "The Government is not about to make [the AMAP scheme] more attractive."

His prediction is that the Government will announce either a cut in the 40p rate to a flat 25p, or reduce the 40p limit from 10,000 miles to 5000. The answer is expected to come in the pre-Budget announcement either in October or November, depending on whether there is an election.

Advisory mileage allowance payments - which are tax-free up to the limits - have contributed strongly to the growth in Employee Car Ownership Schemes, a trend that has unsettled the Government.

"The Inland Revenue says that reducing the levels drivers can be reimbursed before they start getting taxed will bring emissions down," said Rawlings.

Rawlings, who oversees the website, also warned companies to be switched onto the implications of the new road fund tax bands, which reward buyers who choose cars with low CO2 levels. "In the next three or four years, the low-tax impact is going to start having an influence on the behaviour of car buyers, which is going to have an impact on residuals. It's a clever stealth tax," he said.