TaxPersonal TaxCompany car tax system faces chaos

Company car tax system faces chaos

Employers and fleet operators fear company car tax bills will be seriously inaccurate when the new rules come into force next year.

Minutes of an Inland Revenue committee obtained by Accountancy Age reveal that car manufacturers’ details on CO2 emissions – the basis for the new tax – differ markedly from figures held by the DVLA.

The divergent specifications mean compiling the right tax liabilities will be extremely difficult, according to tax experts.

Alistair Kendrick, a tax director with Ernst & Young, said the Revenue is telling employers that the reporting responsibility is with them so they must find the right information.

Kendrick described the position as ‘absolutely ridiculous’ and that ‘the Revenue has dismissed itself from responsibility’.

Minutes of a meeting last month of the Revenue’s better regulation committee show that the Consumers’ Association raised the issue of ‘confused information’ but there was little response from the taxman. The minutes record a suggestion that taxpayers be given ‘leeway’ for calculating their company car tax.

Opinion is now forming around the idea that the Revenue should provide the definitive information on CO2 emissions for employers’ reference.

Teresa Fritz, principal researcher with the Consumers’ Association, said: ‘It’s absolutely essential that there’s a definitive source of information so that people know where to look.’

She said discrepancies in the information would lead to confusion among consumers about their tax liabilities. The Revenue this week said manufacturers provided CO2 information to the DVLA for inclusion on registration documents.

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CO2 tax to change company fleets

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