THE failure of the Government to clarify its position on the future taxation of the company car has prompted some fleets to extend their vehicle holding periods. A number of companies were waiting for last month's Budget before making future contract hire commitments, but Chancellor of the Exchequer Gordon Brown failed to give anything but the slightest clue of how he intends to levy benefit in kind tax on company cars in years to come.

Now there are signs that fleets are delaying the renewal of contracts until the unveiling of the white paper on an integrated transport solution. This, it is hoped, will contain more detail about possible changes in company car tax, and particularly the mooted switch from business mileage tax breaks to tax breaks designed to incentivise lower private mileage.

Geoff Becque, GE Capital Fleet Services' director of corporate communications, said: 'Some customers who may have been due to change vehicles in the spring, particularly those with executive cars or low business mileages, are thinking they may as well wait until after the white paper, and in that case, they may as well wait until August for the new registration letter.'

At the John Wallwork dealership group, which runs a contract hire fleet of 1,350 vehicles, Gary Stokes, general manager of corporate sales, said: 'We have seen a significant increase in people extending contracts by up to one year until they see exactly what the outcome is of the Government's white paper.'