BUILDING materials giant Hanson is scrapping its 1,250-vehicle company car fleet to protect drivers from massive tax increases under the new carbon dioxide-based company car tax regime. The dual-badge fleet is to be dropped in favour of a structured personal leasing scheme offering drivers the convenience of a company car, but allowing them to own the vehicle so they do not have to pay benefit-in-kind tax.

The firm will also scrap all free fuel for private mileage from April 6 in response to massive increases in tax on the perk of 20% above inflation annually, leaving drivers paying more in tax than the perk is worth. It will be keeping a department of fleet administrators to manage the changes and handle queries from drivers.

Hanson has become the latest in a series of companies that have looked to provide the equivalent of company cars without the tax burden. During a series of nationwide seminars, Hanson staff were shown why the company felt it had to act, with 90% of drivers paying more company car tax under the new regime, to be introduced next year.

High mileage drivers covering more than 18,000 miles, who make up 50% of the Ford and Vauxhall fleet, are worst affected under the new tax regime, as they are currently paying tax on 15% of the list price of the car. From 2002, the benefit in kind charge will be based on a car's list price and the amount of CO2 emissions it produces, starting at 15% of list price for 165 g/km of CO2 and rising 1% for every 5g/km increase in emissions. A typical fleet car, with emissions of between 190 and 220g/km of CO2 would be taxed at 20% to 25%, but drivers of less fuel-efficient cars could see their bills rocket to the maximum 35%.