FLEETS have won a major victory in this year's Budget, with the removal of benefit-in-kind tax on company sponsored green transport schemes. From April 6 there will be no BIK charge on work buses, subsidies to public bus services along with company bicycles and safety equipment, at a cost to the Government of £5 million.

Fleets had condemned the Government for its two-faced attitude to the environment by demanding companies implement green transport plans, yet charging them thousands of pounds in BIK for running them.

Where employees get between work and home other than by private car, for example on a bus provided by an employer, a tax charge can arise on the employees who use the facility. It is too complicated to share the charge out to individual staff, so the company ends up having to foot the bill. Examples included Boots, which faced a £500,000 bill for providing work buses for staff to avoid them using their cars.

Companies had been lobbying the Government hard, warning that green transport plans could be abandoned if the unfair tax treatment of the schemes continued.

Car sharing schemes have also been encouraged in the Budget, with payments to employees to travel home now BIK-exempt if they involved late night travel or were caused by a breakdown in car sharing arrangements. A 12p tax-free mileage rate will be introduced for business cycling.

  • For your free ACL guide to how this Budget affects company cars - published in conjunction with Deloitte & Touche - click here.