Companies unprepared for van tax hike
13 July 2007
Research has revealed that almost a quarter of companies operating van fleets were unaware that the benefit-in-kind tax charge on company vans was increasing by 600%, unless they can prove that their vans are only used for business and not personal use.
Twenty-three per cent of companies questioned in a survey, commissioned by vehicletracking specialist Navman Wireless UK, admitted to being ignorant of the Government
tax hike that came into force this April. The tax charge on company vans has soared
from £500 to a massive £3,500 if proof cannot be provided.
The survey also revealed that, of those that were aware of the increase, around a third
(32 per cent) are failing to take steps to provide evidence of when, where and how a
vehicle is used.
The scale charge for unrestricted private use has increased to £3,000 and if an employer
provides fuel for unrestricted private use, an additional fuel charge of £500 will apply.
Furthermore, companies have to pay more in employer’s NI contribution if they cannot
prove how many private miles their fleet does – 30 per cent of those questioned however
said they were unaware of this fact, and 27 per cent of companies said they were unable
to prove in any case how many private miles their fleet does.
“The onus is on employers to provide proof of use but these statistics suggest that many
companies have been ill prepared for the tax rise,” explains Tony Neill, Vice President
Europe, Middle East and Africa at Navman Wireless Business Solutions
“Vehicle tracking technology offers an opportunity for them to present clear evidence of
vehicle use. The Navman system automatically keeps accessible records for 18 months,
before archiving, providing employers with documented proof that the van is being used
only for business use.”
Navman Wireless Business Solutions provides vehicle tracking, two-way text
messaging, fleet monitoring and reporting software and satellite navigation systems.
