Fleet&Leasing.com. It’s new. So – why?
NOT since 2002, when company car taxation changed to its current CO2-based format, can I remember a time when there were so many questions, so few answers.
In many ways it was easier in 2002.
The company car tax system changed from a system that favoured 2.0-litre petrol executive cars with a list price below £19,250, to one based on CO2 emissions.
It was fairly simple in reality. The lower the CO2, the less tax to be paid. Enter the diesel revolution. Volkswagen nailed it with the Passat 1.9 TDI. Most other brands were left flat-footed with suddenly irrelevant petrol cars.
It required a significant rethink in fleet management company car business planning.
However, in 2002 I would argue it was a case of lack of understanding, rather than lack of answers.
In today’s fleet world, there are plenty of questions but little hope of finding the right answer thanks to a government that’s simply lost the plot on company cars and company car taxation.
A government, hijacked and emasculated by Brexit, that can deliver the long term vision (The Road to Zero) but is incapable of signposting the steps in between.
Where are the benefit in kind rates beyond 2020/21? Pass.*
Why do company car rates for zero emission cars rise to 16% in 2019/20 then slump to 0% the following year? Logic: missing.
Why is van VED cheaper from more polluting vans than it is for the latest Euro 6 vans (the ones that can access Clean Air Zones, such as London’s Ultra Low Emission Zone, without penalty)? Answer: nonsensical.
The truthful answer is: we don’t know. Of course, the suspicion is that the government is leaving us hanging out there because its tax receipts are more than welcome.
Indeed, Fleet News reported that tax receipts went up by 24% to £360million in 2016/17 despite there being fewer company car drivers. Lex Autolease, the UK’s largest leasing company, reckons tax receipts will rise to £2billion in 2020.
There is, then, some justification for that suspicion.
But all of that is irrelevant. It’s irrelevant because businesses, from the one business car LTD to the multi model large fleets need to make decisions on car and van acquisition.
What is required is required, then, is intelligence and understanding to make the best decisions possible.
Fleet&Leasing.com plans to rehearse the arguments and analyse the issues surrounding fleet management and car and van leasing.
That way we can arrive at a better understanding of the decisions that need making. Or, perhaps, not. It’s that kind of fleet and leasing world at the moment.
*Since writing this piece, the new company car benefit in kind rates have been announced. And thankfully they do include some welcome signposting on ultra low emission fuels. Nevertheless, there is still a high degree of complication: two different tables, one for cars registered before April 06, 2020, and one for those registered afterwards. It means drivers could be paying differential rates of company car tax on the same car – depending on when they are registered – until they are equalised in the tax year 2022-2023. Nothing’s easy, eh? Ralph Morton, editor.