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HOW TO MANAGE THE GREY FLEET EFFECTIVELY

Car Leasing, Company News, Fleet Industry News, Tax and Legislation News

The grey fleet is an important but often neglected aspect of fleet management. The grey fleet consists of employee-owned vehicles, bought with their own money and reimbursed on a pence per mile basis. It is estimated that there are approximately four million grey fleet cars in the UK– more than three times the number of company cars. Therefore, it is crucial that opportunities to reduce emissions and cut costs are identified. Effective management of the grey fleet is crucial with respect to three key policy areas: financial efficiency, health and safety and environmental sustainability.

For many organisations that operate a grey fleet it will not be practical to eliminate it entirely. For some employees and some journeys, continuing use of the grey fleet will be the best all round option. However, it must be managed properly, and often this is not the case.

The Business Case

The business case for managing the grey fleet stems from the significant amount of money that many organisations spend on reimbursing employees. Managing the grey fleet carefully may well have financial benefits in terms of reduced mileage reimbursement payments. But the importance of employers’ duty of care must not be overlooked. The law is clear – an organisation has a legal duty of care to an employee, regardless of vehicle ownership, so the grey fleet needs to be managed as diligently as company-owned or leased vehicles. Some key factors to consider include:

The most dangerous thing many people do at work is drive. Up to one in three road crashes involves a vehicle being driven for work and it is estimated that there are around 200 work-related deaths or serious injuries on the roads every week. The Health and Safety Executive (HSE) estimates the costs arising from ‘at-work’ road traffic accidents to be in the region of £2.7 billion per year. The Health and Safety at Work Act 1974 states that “it shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all employees.” Employers have a duty of care, therefore, to their employees, no matter how small their grey fleet Furthermore, under the Corporate Manslaughter Act (2007), companies can be prosecuted for deaths of drivers resulting from work-related journeys where negligence is proven. If it can be demonstrated that senior management are responsible for a gross breach of duty of care resulting in death, penalties can be applied including unlimited fines and publicity orders. Therefore it is important for organisations to be proactive in managing

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Fifth of the country's roads have potholes

Car Leasing, Company News, Uncategorized, , ,

Potholes are becoming an ever increasing problem to all drivers there popping up faster than daffodils and recent reports seem to confirm this with one in five roads affected by pot holes due to the bad weather. But I don’t think we really need a survey to tell us this as I’m sure everyone who drives has noticed this for themselves.

A survey carried out by the AA of more than 22,000 people has revealed that in the last two years a third of AA members have suffered pothole damage to their cars – and the situation looks set to worsen thanks to 30 per cent more potholes being reported on our road network than at the start of 2012.

This has a massive effect on all drivers and as potholes are a major factor in causing axle and suspension failure, which counts for a third of mechanical problems on the UK roads and costs British motorists an estimated £2.8 billion every year. This can make a massive difference on peoples motoring budgets whether it’s a private vehicle or on a Contract hire vehicle.

Roads in Scotlandand Yorkshire and Humberside were rated as the worst in Britain by those taking part in the AA  poll, with 40 per cent rated as being in poor, very poor or terrible condition.

Northern Ireland,Wales and London have the best roads. However, 50 per said that the pothole problem had grown in the last 12 months

This reflects the effects of very wet and frosty weather on poor road surfaces. Potholes form as water freezes and expands in cracks in the road surface. Passing traffic opens up the damaged road surface and rain washes out loose material

The AA also reports that a recent study by the Asphalt Industry Alliance revealed a £2.5 billion maintenance backlog in England and Wales. This makes things look particularly bleak as there are more potholes, a bigger maintenance backlog and less cash.

A recent report by potholes.co.uk also revealed that potholes are increasing not just in quantity but size too. Its study used data from more than 10,000 pothole reports, and found that the average depth of a pothole had increased from 3in to 4in in the last two years.

It says that with 2012 being the second-wettest since records began, plus the freezing winter conditions, it's no surprise that potholes, which are caused when moisture seeps into cracks in the road surface and then freezes, thus expanding and cracking the road, are worse than ever. But they believe it is not just the weather at fault the under-investment by the Government by using temporary fixes has just escalated the problem over the years.

The advice from the experts is to report potholes to potholes.co.uk or fixmystreet.co.uk. These websites will report the potholes to the relevant local authorities, and monitor the report until the pothole has been repaired. Further more, by reporting a pothole to either of these sites, it becomes a matter of record, which is actionable.  They urge drivers to report potholes to highways authorities to allow them to take action and prevent road users from being endangered and their vehicles suffering damage.

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UK March car sales beat expectations

Car Leasing, Company News, Fleet Industry News, ,

March accounts for almost a fifth of the year's trade.

UK new car registrations outperformed expectations in March, jumping almost 6% against a year ago, the Society of Motor Manufacturers and Traders (SMMT) has said.

The  SMMT said March, when new number plates are released, was typically a strong month for car registrations.

However, the increase this March is well above the almost 2% recorded at the same time last year.

The UK figures defy the EU trend, which remains downwards.

There were 394,806 registrations of cars with the new 13-plate, a 5.9% increase year-on-year, supported by strong demand for private registrations, which rose 7.8%.

Private registrations accounted for 51.7% of the market, followed by fleet (43.5%) and business (4.8%).

Volumes were at their highest since the 2010 Scrappage Incentive Scheme and the increase represents the 13th consecutive month of growth.

The March figures took total registrations for the year-to-date to 605,198, a 7.4% increase on 2012.

It has been the new models and the latest technologies that has been the main reason for attracting the new business

Registrations of petrol-fuelled cars have risen by 12.1% so far in 2013, outselling diesels. This was spurred by growth in the small car and private sector markets, the SMMT reported.

Registrations of alternatively fuelled cars dipped in the month, but rose by 2.9% in the first quarter.

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Budget: Fuel duty scrapped and new company car tax bands introduced

Car Leasing, Company News, Fleet Industry News, Tax and Legislation News, , , , , , ,

The chancellor has cancelled the planned rise in fuel duty, while also introducing two new company car tax bands for ultra-low emission vehicles.

The 1.89 pence per litre fuel duty increase that was planned for September 1, 2013, will be scrapped. This means that fuel duty will have been frozen for nearly three and half years, the longest duty freeze for over 20 years

Meanwhile, the Government is introducing two new company car tax (CCT) bands for ultra-low emission vehicles.

From April 2015, two new CCT bands will be introduced at 0-50g/km and 51-75g/km. The appropriate percentage of the list price subject to tax for the 0-50g/km will be 5% in 2015-16, and 7% in 2016-17.

The appropriate percentage of the list price subject to tax for the 51-75g/km CO2 band will be 9% in 2015-16 and 11% in 2016-17.

In 2017-18 there will be a 3 percentage point differential between the 0-50 and 51-75g/km bands, and between the 51-75 and 76-94g/km band.

In 2018-19 and 2019-20 there will be a 2 percentage point differential between the 0-50 and 51-75g/km bands and between the 51-75 and 76-94g/km bands.

In future years CCT rates will be announced three years in advance.

The thinking behind this is that this will stimulate the market for ultra-low emissions vehicles. And with the added incentives of low taxation motoring this could persuade more fleets to use them as part of their everyday operations.” 

Some other measures announced, included:

Fuel benefit charge (FBC) – From April 6, 2014, the FBC multiplier will increase by RPI for both cars and vans. Van benefit charge (VBC) – the Government will freeze the VBC at £3,000 in 2013-14 and will increase it by the RPI only from April 6, 2014. The Government commits to pre-announcing the VBC one year ahead.

Capital allowances for business cars: first year allowances (FYA) – As announced at Budget 2012, the 100% FYA for businesses purchasing the lowest emissions vehicles will be extended until March 31, 2015.

From April 2013, the carbon dioxide emissions threshold below which cars are eligible for the FYA will be reduced from 110g/km to 95g/km and leased business cars will no longer be eligible for the FYA.

The Government will extend the FYA for a further three years until March 31, 2018. From April 2015, the carbon dioxide emissions threshold will be reduced from 95g/km to 75g/km.

Capital allowances for business cars: as announced at Budget 2012, the carbon dioxide emissions threshold below which cars are eligible for the main rate of capital allowances will be reduced from 160g/km to 130g/km from April 2013.

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BVRLA claims plans will push fleets away from greenest vehicles

Car Leasing, Company News, Fleet Industry News, Tax and Legislation News, , , , ,

Plans to remove 100% First Year Allowances on low-emission cars purchased for leasing will push fleets away from the greenest vehicles, the BVRLA has warned the chancellor in its Budget submission.

The submission focusses on three key areas where the association feels the Government’s strategy to reduce road transport carbon emissions is badly flawed.

The leasing industry has led the way in driving down CO2 emissions, helped by a tax regime that incentivises fleets and drivers to choose greener vehicles, But this  is being threatened by some glaring policy errors that the government needs  to deal with.

The BVRLA  is arguing for the Government to retain 100% First-Year Allowances for low-emission leased cars.

These allowances give corporate purchasers the ability to write-off the cost of low-emission cars against their taxable profits in the first year of ownership, says the BVRLA.

Unfortunately, even allowing for reduced fuel costs, such low-emission eco-diesel, hybrid and plug-in cars are more expensive than their higher-emitting petrol and diesel counterparts and the allowances play a vital role in enabling fleets to bridge this cost gap. 

It says that UK leasing companies have been very successful at passing on the benefit of these allowances to their customers. More than 19% of the company cars they supply currently qualify by virtue of emitting less than 110g/km CO2.

However, from April, the government wants to remove the ability to claim 100% first year capital allowances on low emission leased cars, while retaining it for direct purchasers.

It has justified this move by claiming that it is worried about the potential for the allowances to be claimed by companies leasing UK vehicles into other countries.

The association believes that removing the allowances discriminates against the thousands of businesses who rely on leasing to finance their transport requirements and will encourage them to lease cheaper, higher-emitting vehicles.

It estimates that the removal of 100% first-year allowances for the sector will lead to average new car emissions rising during the next tax year.

It is also arguing for a review of the current Approved Mileage Allowance Payment (AMAP) system, which reimburses employees who use their car at work as this  is the only company car tax or allowance that incentivises motorists to drive more.

In most cases, current AMAP rates overcompensate for work use of the average car and as such can provide tax-free extra income to many workers, who have an incentive to drive more ‘business miles’.

The BVRLA wants AMAP rates reviewed and linked to vehicle emissions, to encourage  fleet drivers to use greener cars and remove any incentive for extra mileage.

Finally, it is also calling for a re-think the Plug-in Car Grant scheme. The Government’s Plug-in Car Grant has been successful in subsidising manufacturers’ over-expensive list prices, but has struggled to drive significant take-up of ultra-low or zero emission vehicles.

The Government needs to replace or support the existing grant with guaranteed long-term incentives such as VED-exemption, subsidised charging points and free parking, which would support owners and stimulate demand for used plug-in cars.

So lets see what happens on March the 20th and hopefully we will have some good news to talk  about.

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