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News and Updates from CVSL

Why London businesses are choosing low emission vehicles

Car Leasing, Tax and Legislation News, ,

The London Congestion charge was implemented by London Mayor, Ken Livingstone in 2003 to reduce pollution in the capital. When the initiative was first launched the charge was £5 and now in 2016 the charge is £11.50 per day for driving within the charging zone between 07:00 and 18.00. If you pay in advance you can reduce the cost by £1 a day with auto pay.

The congestion charge can be expensive, especially if you are a business with multiple cars and if residents discount doesn’t apply to you, this could cost you up to £2898 per year. As a resident this would cost you £289.80 per year.  You can check here whether your property’s address qualifies for  residents discount.

This is the reason why more and more businesses in London are switching to for low emission vehicles as they are exempt to pay congestion charge under the Ultra-Low Emission vehicles.

Which cars are exempt under the ‘Ultra Low Emission Discount (ULED)’?

Vehicles that are eligible for the Ultra Low Emission Discount include all models that produce less or equal to 75gCo2/km and meet Euro 5 emissions standards.  Under the current scheme this includes all electric and most plug-in hybrid vehicles but conventional hybrids are treated as petrol and diesel vehicles only qualifying if their emissions are 75gCO2/km or less and are Euro 5. Please note the TFL reviews it schemes regularly.

If you would like to know more about low emission vehicles and how you can save money speak to CVSL today.

london traffic - congestion charge

What does the 2016 budget means for motorists?

Tax and Legislation News

Fuel duty will be frozen again in 2016-2017
Chancellor George Osborne has announced that fuel duty has been frozen for the sixth consecutive year. The current fuel duty price is 57.95 pence per litre for 2016-17, which means that pump prices are now 18 Pence cheaper than they would have been if the Government had maintained pre-2010 fuel duty escalator plans. This will save the typical motorist £75 a year and £275 a year for a small business with a van.

Company car tax and allowances
100% First Year Allowance (FYA) for businesses to purchase low emission vehicles has been extended for a further three years. The threshold however has been lowered from 130g/km to 110g/km of CO2 and the FYA from 75g/km to 50g/km of CO2 from April 2018, to reflect falling emissions.

The chancellor also said he will continue to base Company Car Tax on CO2 emissions of cars and consult on reforming lower CO2 bands for ultra-low emissions.

Driverless cars
Driverless cars will be tested as soon as next year. The Chancellor has said that driverless cars would be trialled on a ‘’strategic road network’’.  The Government has said that it will be investing in driverless cars as it wanted the UK to be “a global centre for excellence in connected and autonomous vehicles”.

Petrol

Three new changes UK motor drivers can expect under the Conservative government

Motoring Advice, Tax and Legislation News
  • ROAD FUNDING – Has committed £15billion to alleviate traffic hotspots, build more lanes and fix potholes.

 

  • ZERO EMISSIONS – £500million to help make every car and van zero emissions by 2050.

 

  • SAFER CYCLING – £200million to increase journeys made by bicycle and make them safer, too.

The motoring section of the Conservatives’ manifesto leading up to the 2015 General Election, started by reminding us that they had frozen fuel duty throughout their 5 years in power and although proud of their record so far, unfortunately there was no such promise for the future.

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Instead, David Cameron and the Conservatives have focused on their promise of £15billion for building 1,300 extra lane miles on the UK roads and enough funding to fix 18 million potholes.

This is also the first we’ve heard of their plans for all vehicles to be zero emissions by 2050 with the help of £500million funding.

To get ahead of the zero emissions curve, read more here: http://www.cvsl.co.uk/how-to-lease-a-car-become-electric

AND get the latest deal on a ZERO EMISSIONS, MERCEDES-BENZ B CLASS HATCHBACK ELECTRIC ART ELECTRIC DRIVE 5DR AUTO for just £344.74 p/m here: http://www.cvsl.co.uk/car-leasing/mercedes-benz/mercedes-benz-b-class-hatchback-electric-art-electric-drive-electric-art-5dr-auto/67098/

The FCA – working hard to stamp out poor industry practice

Fleet Industry News, Tax and Legislation News

Until late last year, it was relatively easy to start up as a leasing company. All you needed was a consumer credit licence, and you could easily set up a website promoting leasing deals to both businesses and individuals.

Previously, manufacturers and finance companies have worked together to clamp down on bad practices and stamp out unofficial agents, but without proper rules and regulations in place, it was always going to be a tough task.

FCA regulations

When the Financial Conduct Authority took over from the now defunct Credit Broker Licences, previously governed by the Office of Fair Trading, on April 1st 2014, all businesses offering finance or leasing options had to apply to the FCA for an interim licence to continue trading.

However, the FCA are now so diligent about reviewing and approving businesses fit to sell consumer finance and lease products, it is estimated that 15% of leasing brokers haven’t even applied.

By introducing stricter criteria for operation, there is an in-depth review process in place before a company can be approved to lease cars.

The FCA also requires leasing brokers to have rigid internal procedures in place to ensure that data collection and protections systems are kept up-to-date.

Since the new regulations were brought in, many firms were deemed to be miss-selling services, mostly by upselling unnecessary options and less cost-effective deals.

Such practices are now strictly monitored and any leasing company found to be in violation of these regulations will be subject to action from the FCA.

CVSL is authorised and regulated by the Financial Conduct Authority. We pride ourselves on delivering good quality service and achieving high levels of customer satisfaction.

How to make your company cars more tax efficient

Tax and Legislation News

When a business decides to provide its employees with a company car, there are other many things to consider than just how much the vehicle will cost.

The biggest one is how you choose to fund your vehicle, or fleet, as different options present different tax advantages.

There are many ways to fund a business car such as the traditional outright purchase, lease purchase with a final balloon payment and hire purchase.

If you are not precious about actually owning the vehicle – with leasing you never actually own the vehicle until the finance has been paid off – then leasing is a great option.

In this instance, businesses can declare the car as an asset and the depreciation is written off against taxable profits.

Depending on circumstances, some companies can even claim tax relief on any interest paid over the duration of the finance agreement.

But unless the vehicle is 100% used for business purpose, the company cannot claim back any VAT on a purchased vehicle.

Contract hire presents an extremely viable option to make company cars tax efficient.

A proportion of VAT can be reclaimed with contract hire, which is an automatic saving in comparison to purchasing the vehicle outright.

With a contract hire agreement, you can claim back 50% of the VAT on the monthly rental charges. However, if the vehicle is used exclusively for business purposes then you can claim back 100% of the VAT.

And you can also claim back 100% on any optional maintenance packages you choose to include, regardless of the vehicle’s use.

Depending on your vehicle emissions, you could also be able to claim the monthly rental against corporation tax.

If your car, or fleet, choices are below the 130g/km CO2 emission mark, you can claim 100% of the monthly rental against corporation tax. If your emissions are above this mark, your allowed rental percentage is 85%.

You can also make savings on your National Insurance contributions if you choose the leasing route.

Although employers must pay Class 1A National Insurance contributions on the benefit in kind value of employee’s company cars, the lower the CO2 emissions of the car are, the lower the NI payments will be.

So, what’s the best advice we can offer on the most tax efficient lease deals?

Steve Black, account manager at CVSL, answered: “Go for a car below 130g/km – even better below 100g/km – and you can make some real savings!”

“Don’t be put off by what people tell you about low emissions vehicles – they are not cheap and cheerful cars. The Audi A3 hatchback is a great example of a glamorous executive car that emits just 99g/km CO2.”

“And not only are there tax benefits, you are also improving your green credentials.”

Call CVSL today on 0800 085 4256 to discuss the best option for you and your business; we’re here to help.