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Benefits Tax To Hit Vans

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Individual and company tax bills could soar when the new benefit in kind tax structure for van drivers is introduced next April, warns vehicle management company LeasePlan.

The company estimates that the tax changes could add £1000 a driver per year to company tax bills. The change relates to van drivers who take their vehicles home for private use. Next April the flat rate tax charge for drivers rises from £500 a year to £3000 a year. LeasePlan calculates that a base rate taxpayer could see his or her benefit in kind tax bill rise from around £9 a month to around £55.

LeasePlan believes that this could result in drivers asking for more pay to cover the increased tax charge, or using their vans more to 'get their money's worth' from their increased tax liability or deciding that they do not want to pay the extra charge and leaving vehicles at company premises overnight. In all cases, LeasePlan believes that it will cost companies more. This could be in extra pay for drivers, increased wear and tear on vehicles or the need for secure premises to store vehicles.

Steve Crawshaw, LCV manager at LeasePlan, believes that for companies to accommodate the extra costs in next year's budgets, they need to start planning as soon as possible to work out what the extra cost will be. He says: "Leaving it until January or later is going to cost them a lot more and could result in a lot of unhappy employees come next April. It could also lead to serious legal implications if it is not managed properly."


by TNN Admin
02/10/2006

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