Just half of fleets aware of changes to company car-related taxation
Only slightly more than half (54%) of UK fleets said
that they knew about tax changes affecting company cars and cash allowances
which were introduced by the government in April, according to new research.
Awareness is very much dependent on fleet size. While 77% of larger fleets
(more than 50 vehicles) said they were aware, the figure dropped to 44% of
medium fleets (10-49 vehicles) and 35% of smaller fleets (one-nine vehicles).
These findings come from the 2017 edition of Arval’s long-established Corporate
Vehicle Observatory Barometer, research which covers 3,847 fleets.
The tax changes, known as Optional Remuneration Arrangements (OpRA), mean that
employees who are given a choice of a company car or a cash allowance are now taxed
on the higher of the two, no matter which option they choose.
The research showed that 14% of all fleets offered a cash allowance option to
all drivers, while a further 21% offered it to some. Furthermore, 3% of
companies offered only a cash allowance without a company car alternative.
Shaun Sadlier, head of Arval’s Corporate Vehicle Observatory in the UK, said:
“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.
“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.
“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