As the government explores new ways to increase tax revenue, a revision of the taxation of benefits in kind (BIN) for company vehicles is under discussion. This potential tightening could increase the burden on both businesses and employees, with a significant financial impact for both parties. What does this reform proposal consist of? What impact will this have on businesses and employees?
In this article, find out everything employees and businesses need to know to anticipate these changes and optimize company car taxation..
Why a revision of the taxation of company cars?
The project under consideration aims to increase the taxation of benefits in kind, based on a revision of the rates applied to company cars. Beyond financial ambitions, the government believes that the rate of private use of company cars is largely underestimated. This is undoubtedly all the more true since the development of teleworking.
This reform would affect all types of company vehicles, whether internal combustion or electric. According to initial reports, combustion vehicles will be the most affected, especially when fuel costs are covered by the company. Electric vehicles would probably be less affected by this tax reform proposal.
What are the risks for businesses and employees?
- For businesses An increase in social security contributions linked to NEAs could lead companies to review their social benefits or mobility policies. The overall cost of managing vehicle fleets could increase, making it necessary to further optimize expenses.
- For employees Company cars are often an integral part of executive compensation. A “Vehicle for benefits in kind” line therefore appears on the gross salary of their pay slip. Like gross wages, this budget line is subject to social security and employer contributions.
With higher taxation, the amounts deducted from their payslips could increase, reducing their purchasing power.
Anticipating and limiting the financial impact of NEAs: Optimum Automotive solutions
Optimum Automotive, a specialist in fleet management since 2006, offers numerous solutions to reduce the costs associated with benefits in kind. Here are two key strategies for businesses looking to optimize their tax situation:
1. Give priority to real tax declarations for optimized tax management
In order to reduce the fiscal impact of NEAs, the statement itself makes it possible to distinguish between private and professional mileage, thus adjusting taxable amounts according to the actual use of the vehicle. Optimum Automotive offers an automated service called “Use and Tax”, which facilitates the monitoring of professional and private use, while optimizing tax costs. The principle is based on the creation of standard models indicating the days and hours of use of the vehicle for professional and private purposes. These schedules can of course be modified to take into account changes, unforeseen events, etc. Thanks to a telematics box, the kilometers traveled are then assigned to a “professional” or “private” category.
Optimum Automobile? The “Usage and Taxation” service provides a precise overview of the use of each employee. A tax simulator can also be used to establish a tax projection in order to determine the most advantageous reporting method (real or lump-sum).
2. Switch to electric vehicles thanks to the electrification study:
Under environmental and governmental pressure (LOM, ZFE, etc.), car fleets are gradually migrating to electric vehicles, which are more economical and more environmentally friendly. In the perspective of more favorable tax treatment for electric vehicles, the electric migration of company vehicles could accelerate.
Optimum Automotive is offering an “electrification study” to guide fleet managers in this delicate adventure. The service is based on an in-depth study of the use of each vehicle over a significant period of time: kilometers traveled each day, number and duration of stops, usual parking spaces, etc. All these parameters make it possible to obtain a precise snapshot of the use of each vehicle and to anticipate the various stages of the energy transition: identification of “electrifiable” vehicles: identification of “electrifiable” vehicles, choice of replacement vehicles, calibration and location of charging stations, forecasting the impact on TCO (Total Cost). Of possession) and carbon footprint.
This study provides fleet managers with a real roadmap ready to use.
Conclusion: preparing for the future to limit car tax costs
Whether the reform of company car taxation becomes a reality or not, there are ways to optimize the taxation of company cars today. Increasing taxation on company cars could have a lasting impact on the finances of businesses and employees. By adapting to solutions like those from Optimum Automotive right now, businesses can not only control their costs, but also proactively anticipate future tax challenges.
