5 ways to make company car tax simple

If there’s one stumbling block that prevents employees taking up a car benefit, it’s benefit-in-kind-tax. This guide gives you five tips to make company car tax simple to increase the uptake of your car benefit programme.

1. PROVIDE WORKING EXAMPLES

Did you know that the UK has one of the worst financial literacy rates in Europe. One in three adults struggle to work out the change due from a shopping trip. Which means you’ve got an uphill battle on your hands when it comes to explaining car benefit tax.

Instead of asking your employees to do the maths themselves, make it easy for them by providing worked examples. You might decide to create a guide on employee benefit tax starting with a more straightforward benefit, like bike for work, before setting out a slightly more complex car benefit example.

This is a tactic we regularly use when talking to drivers about BIK car tax.

2. USE A PROVIDER WITH AN IN-BUILT TAX CALCULATOR

General car tax examples are fine when someone is at an early stage in their car benefit decision making process. But as they get into the nitty gritty and start to look at specific makes and models, they need to know exactly how much tax they’ll need to pay.

It’s too difficult for the vast majority of people to do this themselves. And it’s out of the question when comparing multiple cars. Which is why it’s important to ensure you’re working with a provider that has tax calculators built into their systems. This way employees can work out exactly how much tax they’ll pay on each car option helping them to reach the right decision for their circumstances.

3. PROVIDE FAQS

Frequently asked question documents shouldn’t be produced as a one-off at the launch of a scheme. They should be living, breathing documents that are updated in line with the kinds of queries your HR or shared services teams regularly receive.

Ask your HR staff to keep an ear out for any tax queries and cover them in your FAQ document to provide a single, comprehensive resource that responds to real-life problems. It will also act as a resource for other employees and line managers taking the pressure off your team as they won’t have to deal with every car benefit tax enquiry.

4. PROVIDE PHONE SUPPORT VIA YOUR SUPPLIER

Talking of dealing with enquiries, your car benefit provider should also shoulder some of the burden. Dedicated employee phone lines manned by expert customer support representatives will be able to deal with car tax queries.

At the best providers, these frontline services are backed up by employee-centered systems and a panel of in-house tax experts. Your provider should be on the front line of tax queries and be informed enough to deal with any question. If your supplier doesn’t offer this level of service, it could be time for a change.

5. MAKE THE MOST OF PROVIDER COMMUNICATIONS

Why reinvent the wheel when you don’t have to? Good car benefit providers will have their own range of communications that you can draw on to explain company car tax. These documents can be designed to match your organisation’s brand providing seamless communications to staff.

And as your provider inhabits the world of company cars and car tax, they’ll be up to date with the latest changes ensuring your business remains on the front foot too.