Nearly half of fleets unprepared for company car tax changes
The YouGov survey found that more than half (51%) of senior managers questioned agreed that the new tax changes would place further financial strain on their business, with more than a third (38%) saying they would be interested in guidance on how to manage the new legislation.
When asked whether they believed that life was harder or easier for business drivers now, compared to 12 months ago, almost half (47%) said it was ‘harder or a lot harder’.
In a separate survey, business drivers also expressed concern about the changes, with 37% saying they would benefit from guidance on how to minimise the effects of the change in legislation. Despite the significance of the tax changes, almost nine in ten (89%) of the same group said they were unaware of the incoming legislation.
David Brennan, managing director, LeasePlan, said: ‘These tax changes have been introduced with the laudable intention of promoting the adoption of lower-emitting vehicles. However our research shows that fleet managers and drivers may not be aware of, or adequately prepared for the specific tax impact these measures may have on their business.
‘Our research has made it clear that there is an appetite for specialist advice around understanding these technical measures, and if explained properly, there is no need for companies to fear the impact upon their fleets. To this end, LeasePlan has engaged in a far-reaching programme of tax optimised solutions and presentations, delivered before the April deadline, to ensure our clients are fully prepared.’
The leasing company has also issued guidance for businesses and drivers on how to minimise the impact of the new tax changes:
1. Seek specialist advice – Inhouse accountants or fleet managers may not have the specific knowledge to minimise the impact of these changes and specialists, such as LeasePlan’s Consultancy Services team, can advise fleet operators on how to best adapt fleet strategy whilst maintaining the balance between cost and benefits.
2. Communicate with drivers – if the wider reasons for operating a lower-emitting vehicle are effectively communicated with fleet users, it is more likely that drivers will be more likely to change their habits.
3. Plan for further changes – whilst a softening of Company Car Tax (CCT) policy has been announced for the lowest CO2 categories of vehicles, CCT and employer NIC will continue to increase: consider a tax inclusive Whole Life Cost policy – unless you are happy to see costs escalate as a consequence of the selection of vehicles in the higher tax bands. First Year Allowances (FYAs) are also changing irrespective of whether you lease or buy. The Government has extended 100% FYA for a further three years to 31st March 2018 but will restrict, from 2015 the threshold to just 75g/km. Consider both the availability and suitability of such vehicles in your policy.
4. Guide driver choice – Manufacturers are starting to offer more vehicles that fall into the lower tax bands. Where possible, and appropriate, employees should be encouraged to select these vehicles.
5. Make fleet a priority – For many companies fleet is a significant cost as well as a critical employee benefit. Decisions about fleet strategy should be a key business consideration in 2013 and beyond.