Arval: ‘Troubling’ that half of fleets unaware of company car tax change

Almost half of fleets were unaware of tax changes affecting company cars and cash allowances introduced in April, according to Arval.

Arval: ‘Troubling’ that half of fleets unaware of company car tax change

In its ‘Corporate Vehicle Observatory 2017’ the fleet provider found that 46% of UK fleets were unaware of the changes which Shaun Sadlier, head of Arval’s corporate vehicle observatory in the UK said was “troubling.” The survey of 3,847 fleet businesses found that larger fleets were more likely to be informed about the change.

A large majority of larger fleet companies with more than 50 vehicles, 77%, were aware, compared with 44% of medium fleets, and 35% of smaller fleets.

The government changes unveiled in April affected employees given a choice between a company car or cash allowance. As a result of the changes, such employees would be taxed on whichever option as a higher value.

According to Arval’s research, 14% of fleets offered a cash allowance option to all drivers, and a further 21% offered it to just some of their drivers. Just 3% of fleet companies offered a cash allowance without a company car as an alternate option.

Shaun Sadlier warned that fleet managers must be able to inform their employees of potential pay reductions.

He said: “It could be that some employees find 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.”