BUSINESS advisers Jacksons are recommending companies to review their car strategy to maximise their savings and benefit their employees.
Senior Tax Manager Carl Whittaker points out that from April 2002 there will be a radical change in the way company cars are taxed.
Company car drivers will be taxed under a scheme based on the level of carbon dioxide emissions.
And there will be no reduction for high business mileage or for vehicles over four years' old.
Jacksons point out that directors or employees with large, expensive, four-year-old company cars could see tax payments treble.
They suggest that thought should be given to future strategy because cars bought now will still be in use in April, 2002.
For example, if a four-year lease on a large company car was taken out now, the employee would see his tax payments increase dramatically from April, 2002 and the employer would find it extremely costly to break a four-year lease agreement after only 18 months.
Jacksons say some employers are looking for other methods of providing company cars and others are seeking to ensure that any new vehicles purchased or leased from now on are more environmentally and therefore financially friendly.
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