Change in tax threshold could influence car market

Wed, 30 May 2007



The cost of driving in the UK is at an all-time high. Not only do consumers have to finance a car using car finance or a personal loan, they also have to find cheap car insurance, worry about servicing and road tax costs, and afford high fuel prices. Motorists already struggling to afford their vehicle could be dealt another blow if a new tax measure comes into place.

The government are apparently planning to slash the tax allowance threshold that lets workers use their own car to go to and from work, or on work business. The move would put financial pressure on both businesses and employees, particularly if it proceeds as intended. The government plan to cut the threshold from 40p per mile to 25p per mile.

If the changes go ahead, and stiff opposition has already been voiced by driving groups and businesses, many people would find it uneconomical to use their car on business. The AA went on record as saying: "They may refuse to allow their cars to be used for work, heaping overheads on business, voluntary and community health organisations that have to use more expensive alternatives to keep their staff mobile ."
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