Fleets urged to remain 'open-minded' in vehicle solutions to keep ahead of tax changes
That’s the message from Hitachi Capital Vehicle Solutions ahead of the second ‘stability’ Budget statement for 2015.
The Government has already outlined Benefit-in-Kind (BIK) rates through to the 2019/20 tax year which, under current proposals, will see zero-emission vehicles’ BiK rise from the current 0% rate to 16% in the next four years. However, Hitachi Capital says an ‘open-minded’ approach to your company car choice lists can allow companies to take advantage of favourable tax rates, especially for low-emission vehicles.
Although it is highly likely that new vehicle’s CO2 emissions will continue to reduce significantly, “utilising new technology should only be the first step,” advised Terry Harvey, head of group tax at Hitachi Capital Vehicle Solutions.
“Fleets should always be looking ahead and reviewing policies to ensure these are as ‘future proof’ as possible. Four-year cycles may now be common but a four-year-old car can easily become a costly asset for the driver in the form of higher benefit in kind tax, especially as BiK rates rise.
“New technology may be a viable option today, saving both the employer and employee money, but taxation systems or newer technology can leave it outdated. At Hitachi Capital, we continuously review fleet policies, looking ahead at legislation and future products ‘beyond the brochure’.
“We strongly advise fleet operators to adopt this approach with their supplier. Failing to have the support of a forward thinking and flexible leasing company can be a costly mistake. At Hitachi Capital, we continuously look ahead and have adjusted optimum terms and contract mileages to build the best solution, both now and for the future.
“Flexible contracts may also become more viable options for some fleets for the same reasons, but an open mind to fuel type, CO2 caps, terms and mileages should be considered by fleets regardless of size or sector. Using a vehicle’s whole life cost with this approach and an innovative leasing partner is the best way to get the most from a climbing taxation system,” Terry Harvey concluded.