Proposed Tax Changes Could Have Major Impact On Fleet Industry
The UK government is reviewing a recent report by the Office of Tax Simplification (OTS).
The OTS' report highlights proposed measures to simplify the taxing and reporting of benefits and expenses for more than 300,000 employers and four million workers. The current system contributes over £3.3 billion in tax revenues every year.
One of the main goals of the report is to reduce the number of P11D forms completed every year (approximately 4.4 million) by almost 90%. Some of the quick fixes that have already been introduced include a facility to re-submit P11D forms online. Other ideas could receive a mention in the Budget on 19th March; other ideas considered include aligning the tax and the National Insurance treatment of Approved Mileage Allowance Payments (AMAP) rate over a tax-free rate of £0.45 per mile. For income tax purposes there are two rates -- £0.45 per mile for the first 10,000 business miles and £0.25 per mile for anything above. For the National Insurance Contribution (NIC) the £0.45 rate applies to all business miles.
The report calls for fleet operators to have the ability to buy several years' worth of road fund licences in order to ease administrative difficulties. Furthermore, OTS recommends that the car fuel benefit be based on the cost of the fuel the vehicle uses, rather than how it is paid for. According to the office the current procedure is impractical and has been made redundant by technology.