Thursday, November 06, 2008
RMIF warns dealers on new company car tax rules
Car dealer staff who have access to a company car but are not allocated a specific vehicle are likely to see their related tax bill rise following the introduction of new car tax averaging arrangement, warns the Retail Motor Industry Federation (RMIF).
HM Revenue and Customs (HMRC) are revising the way that tax due on company car use for motor trade staff is collected. The current situation, where dealers make individual agreements with their local tax office, is perceived to be inconsistent. A new national arrangement will come into force on 6 April 2009, and will replace all local agreements.
RMIF Director Sue Robinson commented: 'The new arrangements are not the result of legislative change, but of HMRC attempting to enforce the existing law more rigidly to ensure best practice. Although HMRC consulted trade bodies on the changes, it was obvious they had already decided the main outline of the scheme prior to discussion. The NFDA have concerns about the arrangements, and have strongly lobbied for changes with HMRC only agreeing to minor amendments.'
Robinson continues: 'We are not sure that this is the correct way forward. There will be winners and losers, but we think there will be more losers. Although we believe in the long run the new system should mean less paperwork for dealers, we are concerned that the impact of the changes will mean more dealer staff will be paying more tax. HMRC wants to stop the unfairness of the current rules, but that unfairness was caused by them failing to monitor the situation properly.'
A review of the new system is expected in Autumn 2009.
Robinson adds: 'The RMIF will continue to monitor the situation, and lobby HMRC, who have committed to undertaking a review within 12 months.'
DATED: 06.11.08
FEED: AW
