Fleet News

Funding can have greatest impact on running costs

THE way a fleet funds its vehicles can have a more fundamental impact on running costs than any other initiative to minimise wholelife costs. The difference between the most and least efficient funding mechanism can be as much as £1,000 per year, according to accountant Arthur Andersen.

It has devised an employee car ownership scheme which acts as an alternative to the traditional outright purchased company car. The Structured Employee Car Ownership Plan (SECOP) sees employees receive a cash allowance to fund a car, but in a scenario which replicates the comfort factors of a company car. Drivers remain in a tax neutral position.

SECOP avoids the benefit in kind tax charge and employer's national insurance, and uses a combination of the Fixed Profit Car Scheme to reimburse drivers' business miles alongside top-up cash payments to make the cash allowance. Drivers acquire their cars under an umbrella package which includes maintenance and fully comprehensive insurance, taking advantage of the bulk purchasing power of their employer.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee