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Car finance stretched by proposed tax increase

Motorists in the UK could soon have yet another aspect of driving costs to worry about, on top of getting the best car finance deal and shopping around for car insurance.

Motorists in the UK could soon have yet another aspect of driving costs to worry about, on top of getting the best car finance deal and shopping around for car insurance.

The government is reportedly considering the reduction of the tax allowance threshold for workers who use their own cars for work.

Such a change could put financial pressure on both employees and businesses as the threshold could fall from 40p per mile to 25p per mile.

Although the plans have not yet been confirmed, drivers groups and business organisations have already voiced their opposition to the proposals.

The AA pointed out that such a change in the tax rules would make it unviable for many workers, such as salespeople or volunteers, to use their own cars for work purposes.

"They may refuse to allow their cars to be used for work, heaping overheads on business, voluntary and community health organisations who have to use more expensive alternatives to keep their staff mobile," it said.

The 25p threshold would, it is believed, apply to vehicles emitting CO2 of 185 grams per kilometre or above.

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