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ALD Automotive has revealed that 35% of UK financial directors do not know how to calculate the total cost of ownership of their business vehicles.
According to a survey ALD conducted with YouGov, over one third of FDs are unaware of the impact of CO2 emissions on employers' National Insurance contributions and just 15% felt they had a detailed understanding of the costs associated with operating their company's fleet.
Total cost of ownership is calculated by adding VAT, NI and fuel costs to the monthly lease price of the vehicle.
With significant tax changes relating to emissions set to come in next year, ALD warned FDs to make sure they have a thorough knowledge of how to work out TCO in order to cut costs by reducing CO2 output.
From April 2012, the 10% low rate band for company cars will fall to 99g/km from 120g/km.
Company car tax will rise by 1% for every 5g/km increase in CO2 above 99g/km.
The charge for cars emitting 120g/km will move up from 10% to 15% in 2012/2013.
ALD said the main effect for employers will be on NI contributions, which are based around the taxable list price and CO2 emissions of the vehicle relating to TCO.
ALD boss Keith Allen said: "Organisations need to ensure they understand how TCO is calculated, otherwise there is a danger businesses will suffer as a result of the tax changes next year."
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