Company Cars

Lord Sheldon Excerpts

Tuesday 10th January 2012 Lords Chamber

Asked by

[Lord Sheldon]

To ask Her Majesty’s Government what action they plan to take to limit high mileage by company cars.

[Earl Attlee]

My Lords, the Government recognise that high mileage by company cars may impact the economy and environment. Our policies encourage businesses to consider whether they can reduce their travel and to embrace sustainable transport choices. Some businesses have operational needs that mean that a company car is vital. Motoring taxes such as fuel duty and company car tax can encourage fuel-efficient behaviour and the use of low-carbon vehicles, in addition to supporting the public finances.

[Lord Sheldon]

I thank the noble Lord for that reply, but is it not clear that mileage is higher for company cars, which are large cars, than for other cars, and is not the greater mileage driven in company cars unacceptably more than the tax liability of the individual?

[Earl Attlee]

My Lords, I do not accept that company cars are necessarily larger than average. It is up to the employer what size car to supply to the employee. The system of company car tax takes into account the retail value of the car plus accessories and the CO₂ tailpipe emissions. A heavier car is likely to, but will not necessarily, have higher emissions and therefore higher costs for the employee.