Taxation, vehicle specifications, funding products, duty of care, the environment....the list is endless and within this complex array of issues and challenges you need to be able to deliver what is best for your company, your drivers and you.
But remember you are not in this alone, we are here to help. With over 25 years of experience and a wealth of knowledge across a vast array of disciplines, products and services we are here to make your job easier and optimise the fleet that you run.
Effectively managing a fleet of company vehicles can be a significant drain on a company's financial and operational resources.
Whether this is achieved through an in-house team, an outsourced fleet management partner, or combination of the two, effectively managing each and every element can be a mammoth task.
Why is it so difficult? Quite simply, the modern fleet operator must take into consideration an ever increasing number of variables. From protecting the environment and managing driver risk, through to employee retention and long term efficiency gains, the pressure has never been greater to optimise your company's fleet operations.
If this is not challenging enough, the current economic climate means that these objectives must be achieved whilst delivering significant and measurable cost savings.
If you need to reduce costs today whilst still safeguarding longer term goals, just click on The Solution find out how we can help.
To have the maximum effect, it is important to approach each element in a structured manner and identify where there are opportunities to do things differently without negatively impacting longer term strategic goals.
Yet it is by successfully balancing the complete mix of requirements and truly understanding the total cost of ownership that a realistic long term solution can be created.
For example, low monthly rentals set at the start of the contract may seem attractive now, but what happens if your vehicle usage or service requirements change.
Of course, many companies offer risk or profit-sharing arrangements. However, as you look for new ways to control expenditure, do these agreements really take into account all the variables that make up your direct fleet costs?
Hilton Vehicle Leasing has built it’s reputation on being fair in our quote Calculation and we still pride ourselves on providing the highest level of cost transparency and flexibility. We do not want to be the here today gone tomorrow company that attracts the internet trawlet. In fact, by proactively managing your fleet and analyzing your current and future needs we try to lower the total cost of ownership and still deliver the highest standards of service and support which far out wieghs any of the brokered internet offers.
A new regime of vehicle testing has begun, and it could have big implications for the taxes paid by fleets and their drivers.
Back in 2009, the United Nations’ World Forum for Harmonization of Vehicle Regulations set about developing a new test to replace the New European Driving Cycle (NEDC), which was introduced in 1992 and last updated in 1997. The aim was to more accurately measure the carbon dioxide (CO2) emissions and fuel efficiency of new vehicles.
This new test – the Worldwide Harmonised Light Vehicle Test Procedure (or WLTP for short) – came into force for all new car types on 1 September 2017. All newly registered vehicles, including those whose types were approved under the old NEDC regime, will have to undergo WLTP tests from 1 September 2018.
The WLTP takes place in the laboratory, as did the NEDC, but it has been designed to be more representative of real-world driving. It is longer than the old tests, lasting 30 minutes instead of 20 and covering 14.4 miles instead of 6.8. The car is driven faster, with an average speed of 29mph (compared to the NEDC’s 21mph) and a top speed of 81mph (compared to the NEDC’s 75mph). The tests feature more realistic driving behaviour – such as more rapid acceleration and more sudden braking – across a wider range of road types. And the WLTP takes into account the effects of optional equipment on both emissions and fuel efficiency.
One of the most visible effects of the WLTP will be to improve the information available to customers when looking for a new car. The CO2 emission and fuel efficiency figures advertised will more closely reflect a car’s actual performance on the road, enabling consumers to make a more informed choice. There is a risk of some confusion initially, however, as some cars will have figures from NEDC tests displayed, while others will have their WLTP results shown.
The WLTP’s more substantial impact, though, will be on Company Car Tax (CCT), Vehicle Excise Duty (VED) and tax relief for business vehicles. All of these depend on a car’s CO2 emissions – so a change to the way CO2 emissions are measured will change the amount of tax that fleets and drivers have to pay.
At Autumn Budget 2017, the Government announced that it will continue to use NEDC figures for the purposes of calculating CCT and VED until April 2020, at which point it will switch to WLTP figures.
However, new models between now and then will undergo the WLTP but not the NEDC. They will therefore have their WLTP results converted to NEDC-equivalent figures for tax purposes, using a simulation model called ‘CO2MPAS’. The NEDC-equivalent figures generated by CO2MPAS may be slightly different to those obtained for the same model in actual NEDC tests, though.
When the official CO2 emissions figure for a particular car changes – first to NEDC-equivalent and then to WLTP – that will affect the amount of CCT and VED due on that car, as well as the amount of tax relief that a business can claim on it.
Both CCT and first-year VED rates are based on a car’s CO2 emissions, with the cleanest cars paying the least and the most polluting ones paying the most. If a car’s official CO2 emissions are higher under the new system than under the old one, it may find itself facing higher rates of both CCT and first-year VED.
In addition, the amount of tax relief that a business can claim on the cars it buys depends on their emissions. Cars that emit 50g CO2/km or less are eligible for a 100% first-year allowance; those with emissions between 50 and 110g CO2/km are eligible for the 18% main rate of tax relief; and those with emissions over 110g CO2/km are only eligible for the 8% ‘special rate’. The changes to the way a vehicle’s emissions are calculated may move some cars from just below one of these thresholds to just above it.
Similarly, the amount of tax relief available for leased cars also depends on their emissions. For Corporation Tax purposes, a business can deduct 100% of the cost of leasing any cars with emissions of 110g CO2/km or less. Cars with emissions above that threshold are subject to a 15% ‘lease rental restriction’, meaning that only 85% of the leasing costs can be deducted. Again, the move from NEDC to NEDC-equivalent and then to WLTP figures may make some cars subject to the lease rental restriction that weren’t before.
Every fleet has its own unique profile, and that profile will determine exactly what impact the introduction of WLTP tests will have. Some fleets will hardly notice any change, while others may face a significant tax increase if they do not take steps to adapt.
Hilton Vehicle Leasing fleet consultants work closely with fleets to help them understand how the WLTP will affect them, and to identify any changes that they should make to their fleet policies.
If you would like to find out how the team can help you, please use the form below to get in touch.