TaxPersonal TaxStaff to take cash rather than car

Staff to take cash rather than car

Employees could choose to take a cash allowance rather than a company cars when the new rules for taxing company cars are introduced in April 2002.

Accountancy recruitment agency Alexander Lloyd predicts employees will turn their backs on the company car over the reported uncertainty regarding CO2 emission figures employers will use to calculate tax liabilities on company cars.

Last week, Accountancy Age obtained a copy of the minutes of an Inland Revenue committee meeting which showed that car manufacturers’ details on CO2 emissions – the basis for the new tax – differ markedly from figures held by the DVLA.

According to Alexander Lloyd employees are already seeking alternatives. Karen Cole, commercial director at the recruitment agency said a company car was no longer seen as a perk adding that the new tax system ‘certainly does nothing to change that perception’.

‘We are finding that, where they have a choice, an increasing number of our high calibre candidates are likely to opt for a care allowance instead of a company car,’ she said.

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Company car tax system faces chaos

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