Company car market ‘currently stable’, says Fleet Alliance
The company car market remains stable and will continue to play a significant role in corporate travel in line with the switch to electrified vehicles.
So says Fleet Alliance as it highlights that latest HMRC figures showing a decline in the number of company car drivers can be in part attributed to a change in HMRC reported procedures.
As announced last week, provisional HMRC data for 2017/18 shows the number of people paying BiK on company cars fell 50,000 compared to 2016/17; down 5.3% from 940,000 to 890,000 in a single year. The fall comes on the back of a 20,000 drop in reported company car drivers in the previous 2016/17 tax year.
HMRC has said the decline in the reported number of recipients of company cars since April 2016 coincides with the introduction of voluntary payrolling and added that at least part of the apparent reduction may be due to employers moving from submitting P11D returns to collecting tax on company cars through payroll, which means that increasing number of employers are opting not to return P11Ds at the end of the tax year. It’s added that while from 2017-18 employers were able to provide more detailed data about the cars being provided through their FPS (Full Payment Submission), provision of this data was not mandatory until 2018-19.
The BVRLA has said that despite the uncertainty over the figures, it believes a downward trajectory in the number of people paying BiK on company cars will continue until the Government makes changes to the company car tax system.
And members of the Michelin Fleet Panel – which includes representatives from some of the UK’s biggest leasing, fleet management and rental companies – have also called for clarity from the Government on company car tax changes as they warn not only that tax uncertainty is delaying as many as 250,000 new company car orders but also that the delay in publishing BiK rates risks driving motorists out of company car schemes altogether.
Now, Fleet Alliance has said that stories over the dramatic decline of the company car are both negative and misleading. It adds that the company car remains the second most reported Benefit-in-Kind following private health care and the most valuable; it is currently worth £4,750m in taxable revenue and a further £630m in employer National Insurance Contributions.
It added that although there is uncertainty over the 2016-17 and 2017-18 HMRC figures, previous years have shown stability, having fluctuated between 940,000 and 950,000 since the 2010-11 tax year.
Martin Brown, managing director of the Fleet Alliance Group, commented: “The number of company cars has remained consistent despite repeated stories about its demise and the talking up of alternatives that sidestep Benefit-in-Kind company car tax.
“It should be remembered that the 940,000 company car recipients pay an average of £1,650 each into the Treasury’s Exchequer and contribute positively to funding welfare, health, pensions and education in the UK.”
Brown added that uncertainty over future taxation, the demonisation of diesels and current unavailability of ultra-low emission vehicles had all had destablising influences on company car decision-making.
“Nevertheless, HMRC statistics suggest the company car remains a stable benefit, a fact reflected in our own managed fleet which has grown during the year to 37,000 vehicles worth £1bn. We believe the company car will continue to play a significant role as we move towards greater electrified vehicle availability,” he said.