Taxation laws for fleets are changing

Posted on Friday, 08 February 2008

Companies operating fleets are facing changes to taxation laws How will it impact employees and employers? The impact of this taxation change will have a significant effect on both employees and employers. Your employees will have to pay their marginal tax rate on this increased BIK figure and as employers, you will be required to pay 12.8% National Insurance on the BIK value. For example: 12.8% of £3000.00 = £384 per annum (equivalent to £32 per month). 12.8% of £3500.00 = £448 per annum (equivalent to £37.33 per month) Multiply this over your entire workforce and ask yourself how this will affect your bottom line. Act now! Companies are being urged to prepare for these changes and encouraged to start planning now! With other factors to consider, such as employees potentially asking for increased salaries to compensate this new tax, issues with increased storage space for vans over night, increased theft risk and therefore increase insurance premiums. Could your business afford to ignore the changes? Businesses must be able to provide the Inland Revenue with evidence that the tax does not have to be paid and the only way to do this is by producing accurate mileage and vehicle usage reports.