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Just over half of fleets are aware of company car tax changes

Date: 09 August 2017   |   Author: Daniel Puddicombe

Just over half of fleets say they knew about tax changes in April affecting company cars and cash allowances, new research has suggested.

According to Arval, 54% said they knew about the changes, while the leasing giant said awareness is very much dependant on the fleet size. While the majority (77%) of larger fleets - defined by Arval as those with more than 50 vehicles on their books - said they were aware of the changes, this drops to 44% of medium fleets (10?49 vehicles) and 35% of smaller fleets (1?9 vehicles).

Arval said the findings come from the 2017 edition of its Corporate Vehicle Observatory Barometer, which polled 3,847 fleets.

The tax changes mean that employees who are given the choice of a company car or cash allowance are taxed on the higher of the two, regardless of which option they choose.

Arval's findings also show that 14% of fleets offer a cash allowance option to all drivers, while a further 21% offer it to some. In addition, just 3% of the fleets surveyed said they only offer a cash allowance without a company car alternative.

"Given that getting on for 40% of fleets that took part in the survey offer some kind of cash allowance option to at least some of their drivers, the lack of awareness across the sector is troubling," said Shaun Sadlier, head of Arval's Corporate Vehicle Observatory in the UK. "It could be that some employees find that their net pay is below the figure they anticipated in the months to come, without any warning given, as a result of the taxation changes, and employers have a responsibility to signpost that this is happening."

He added: "Specifically, there seems to be a very low level of awareness among the smallest fleets and it could be that, as an industry, we need to step up our efforts to educate employers operating fleets in this segment."

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