By David Raistrick, UK automotive leader, Deloitte
As the 2014 Budget draws ever nearer, fleet managers and operators will be giving consideration to what is likely to be included and what they ideally would like to hear the Chancellor announce.
I would expect there to be something relating to Advisory Fuel Rates (AFR) for electric cars.
HMRC has indicated that Authorised Mileage Allowance Payments (AMAPs) can be applied to business mileage in private electric cars, but there is currently nothing covering business mileage in a company vehicle.
Also, with regard to AMAPs, there is currently no distinction for National Insurance Contribution purposes between company and private cars. We may see a change in NIC regulations limiting AMAPs to drivers of private cars.
In addition, to demonstrate the overall commitment to electric vehicles in fleets, a change in the law to allow for the use of dedicated charging points without giving rise to a taxable benefit would be welcome as would tax incentives for companies installing charging points on their premises.
Finally on EVs, taxable benefits are currently calculated against the list price before any Government grants are applied. I think it would make sense for the benefit to be calculated after the grant has been applied.
In order for the technology to be a success, the temptation to tax too heavily and too early has to be resisted.
I believe there is an opportunity to present a huge administrative easement for the fleet industry by allowing car fleet operators to buy multi-year road fund licences.
As this was outside the Office of Tax Simplification’s remit, it falls under the DVLA for consideration but the phasing out of the paper tax disc has opened the door for this change.
Finally, HMRC is reviewing its approach with regard to VAT and salary sacrifice schemes.
While tax efficient, salary sacrifice schemes do contribute tax revenue and where applied have led to the lowest levels of CO2 emissions ever achieved in company fleets.
If the Government is serious about its green agenda, it needs to ensure that HMRC states its support for the schemes as currently operating.