Some large fleets are extending leasing contracts due to uncertainty surrounding the new WLTP fuel consumption and emissions test on company car benefit-in-kind tax impact, says Arval.
Information on taxation has only been made available by the government up until tax year 2020/21, meaning that many drivers and their companies acquiring cars now do not know how much tax they will have to pay over the life of a vehicle.
Shaun Sadlier, Arval’s head of consultancy, said: “Fleets find themselves caught in limbo. The government has yet to indicate when it will make a decision on how WLTP is incorporated into company car taxation, and the actual figures are some way off.
“For many years, benefit-in-kind tax tables have been made available for three to four years in advance, so that businesses and their drivers have a good indication of their tax liability and can plan accordingly. But at the moment, we simply don’t know what is happening.
Consequently, Arval claims they are seeing an increasing trend of fleets, especially larger corporates that are generally better informed about WLTP sidestepping the situation by extending lease contracts on a month-by-month basis.
Shaun added: “This, at least, will allow them to wait until there is an announcement from the government and make an informed decision on vehicle choice at that point.”