TaxPersonal TaxWhitehall farce over new CO2 tax

Whitehall farce over new CO2 tax

The Inland Revenue was this week lambasted by accountants over the 'major catastrophe' predicted by the industry last year, which could see almost two million company car drivers paying the wrong tax on their vehicles

From 6 April, a new system for calculating the value of the benefit of a company car will be introduced.

The charge will be based on the car’s CO2 emissions, but the Revenue has been embarrassingly forced to publicly apologise to drivers over its blunders.

Revenue staff don’t have all the information required to calculate the value of the benefit using the new rules – while for those drivers it does have information from the PAYE coding notices are based on estimates and will need changing, meaning drivers will underpay tax and face an unexpected bill later.

A Revenue statement, said: ‘Where the correct information has been provided to us by employers, the recently issued coding notices have not been calculated as they should because of a problem with our computer systems. We apologise for this.’

Last August, E&Y senior manage Alastair Kendrick predicted the problem, sparking a spat with Mary Braim, Revenue policy advisor on transport benefits, who said ‘finding the right CO2 figure (was) straightforward’.

Kendrick, said: ‘Previously the Revenue rubbished suggestions it would not be ready. However, the shambles has emerged. It says it will sort the issue out by April, but that won’t happen, it is a farce.’

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