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THE MAJORITY of small and medium businesses were unaware of company car tax changes that will leave some employees with less take-home pay.

According to Arval’s latest research,  only slightly more than half (54%) of UK fleets said that they knew about tax changes affecting company cars and cash allowances introduced by the Government in April.

And while 77% of larger fleets (more than 50 vehicles) said they were aware, this drops to 44% of medium fleets (10-49 vehicles) and 35% of smaller fleets (1-9 vehicles).

These findings come from the 2017 edition of Arval’s Corporate Vehicle Observatory Barometer, research which covers 3,847 fleets.

The tax changes mean that employees who are given a choice of a company car or a cash allowance will now be taxed on the higher of the two, no matter which option they choose.

The research shows that 14% of all fleets offer a cash allowance option to all drivers while a further 21% offer it to some. Furthermore, 3% of companies offer only a cash allowance without a company car alternative.

Shaun Sadlier, head of Arval’s Corporate Vehicle Observatory in the UK, said: “Given that getting on for 40% of fleets that took part in the survey offer some kind of cash allowance option to at least some of their drivers, the lack of awareness across the sector is troubling.

“It could be that some employees find that their net pay is below the figure they anticipated in the months to come, without any warning given, as a result of the taxation changes and employers have a responsibility to signpost that this is happening.

“Specifically, there seems to be a very low level of awareness among the smallest fleets and it could be that, as an industry, we need to step up our efforts to educate employers operating fleets in this segment.”

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