Call for government to assess fairness of vehicle tax during Covid-19 lockdown

Date: Thursday, April 2, 2020   |   Author: James Dallas

The Association of Fleet Professionals (AFP) has called on the government and HMRC to examine the impact of the coronavirus lockdown on benefit-in-kind taxation for company vehicle drivers.

AFP co-chair Caroline Sandall said: “Overall, there is a fundamental question of fairness here. Can you justify taxing people on a benefit when that benefit is not really available for use?

“That’s what is happening at the moment with company cars and vans that can’t be used except for essential travel.”
 
Sandall added the pandemic would impact on all drivers of company cars and vans to an extent but said some would be severely affected, such as those who have been furloughed from work and would find it tough to pay their tax bill while on only 80% of their usual salary, which is the proportion the government has committed to cover during the furlough period.

“Ideally, of course, we would like to see a suspension of benefit-in-kind taxation on company cars and vans for the period of the lockdown,” Sandall said, but acknowledged: “Given government and HMRC current priorities, that may not be possible.”

Van Beneft-in-Kind tax stands at £3,430 a year, which means a 20% taxpayer is liable for £686 while a driver in the 40% tax band pays £1,372.



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