Most people can be forgiven for not finding taxation the most exciting part of running a car fleet. But for those who do, 2006 was not a vintage year. We eagerly watched two Budgets and a Queen’s speech but were left deflated with only a few throw away remarks about what may happen in the future and how driving a 4x4 in town will soon be as socially acceptable as smoking roll-ups in a nursery school.

So with a freshly polished crystal ball and eagerly anticipating change what do I think we can expect in 2007?

The Government have proved they can use taxation to encourage people’s behaviour with the 2002 company car benefit in kind rules. 2007 will most likely see companies being encouraged in the same way with the introduction of a new capital allowance system again based on the car’s CO2 emissions. This will probably mean that a company buying low emission cars will enjoy greater tax relief in the first years.

The Government appears to be willing to consider reviewing the expensive car leasing disallowance provided that the cost is recovered as part of the new capital allowance system. Don’t forget leasing companies will also be affected by these changes and any benefits they enjoy or penalties they suffer because of these changes will ultimately be reflected in their rentals. Early in 2007 prudent fleets managers should remember to buy more batteries for their calculators as they look forward to a whole new “should we lease or buy our cars?” conundrum.

Fleets who adopted alternative car schemes, particularly those who operate under credit sale arrangements, are now finding that the day to day compliance and administration is very labour intensive. Added to this the Revenue’s ongoing review of such schemes and the questioning of the financial savings, some large fleets are now trickling back to company cars. It may not take much in the way of change to see this become a flood.

The congestion charging zone in London is set to be extended with Ken Livingston threatening daily rates as high as £25 for the heaviest polluters. Many other major cities have considered and rejected their own congestion charging plans. It may not be long before the Government forces them to follow London and makes all drivers consider the viability of a car for every journey. No doubt we will also hear more talk of road tolls and the use of telematics to charge for individual roads.

In summary what we said many years ago still holds true. The Government still wants us to buy cars; it just doesn’t want us using them.