THE dramatic decline of the company car, generated by media headlines, are both negative and misleading says fleet management and leasing provider, Fleet Alliance Group.
It says that a desire for sensationalism is masking an underlying stable company car market.
The company car remains the second most reported benefit in kind following private health care. It is also the most valuable, worth £4,750m in taxable revenue and a further £630 million in employer National Insurance Contributions.
According to HMRC figures, the number of company car drivers remains constant, too, at 940,000 having fluctuated between 940,000 and 950,000 since the 2010-11 tax year.
The current statistics were announced by HMRC on June 27, 2019. They cover the benefit in kind recorded on P11D returns for 2016-17.
However, provisional estimates for 2017-18 suggest a drop of 50,000 to 890,000. While this sounds significant, HMRC states in its explanatory paragraph that: “Figures for 2016-17 and 2017-18 do not include any estimate of the impact of voluntary payrolling. Initial HMRC analysis suggests that this accounts for a significant proportion of the decline in reported numbers.”
Payrolling is the inclusion of benefits such as company car tax on payroll rather than the yearly P11D on which the statistics are based. HMRC says, “This has implications for the longer-term viability of these statistics,” but it is working on a way to reconcile payrolling with its current P11D statistics.
Martin Brown, managing director of the Fleet Alliance Group, commented:
“It’s important that the media takes a balanced view of such important statistical information.
“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 £1650 each into the Treasury’s Exchequer and contribute positively to funding Welfare, Health, Pensions and Education in the UK.”
Mr Brown added that uncertainty over future taxation, the demonisation of diesels and current unavailability of ultra-low emission vehicles had been destablising influences on company car decision making.
“Nevertheless,” Mr Brown added, “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 £1 billion. We believe the company car will continue to play a significant role as we move towards greater electrified vehicle availability.”
If you are interested in knowing more, it’s worth reading this feature, too: Mobility remains a future solution as fleets stick to their company cars