Fleet News

News analysis: How fleets are joining the battle against bureaucracy

BUREAUCRACY – as difficult to deal with as it is to spell

Barely a week goes by without a new announcement that adds to the burden of paperwork facing fleet decision-makers.

From tax returns to insurance regulations, emissions restrictions and new legal requirements, the list is endless.

As Europe becomes increasingly involved in the UK’s affairs, the mountain of red tape facing fleets will grow, with much of the new legislation affecting fleets beginning life in the EU.

For small businesses in particular, the pressure is enormous, particularly where staff resources are already stretched.

Fleet News revealed last week, at the campaign’s launch, that there is already a high degree of confusion surrounding the levels of paperwork they deal with.

Network, the specialist provider of vehicle leasing solutions to small businesses, discovered 40% of small businesses found legislation perplexing. A further 36% were unaware of the current debate about fleet health and safety legislation. According to Network’s survey, the only recent legislation that respondents found clear was the ban on using a mobile phone while driving, with 90% aware of the new law.

As we reveal below, there are a number of areas where fleet decision-makers feel overwhelmed by the paperwork and complexity of rules and regulations.

Road tolls

IT is easy enough for politicians to create road tolls and introduce new fines, but for fleets it means they end up pestered by more paperwork.

The biggest gripe for companies throughout the country was handling congestion charging issues when they went into the capital. There have been numerous complaints about difficulties with signing up to the bulk payment scheme, designed to ease the burden on large fleets.

For small companies, paying should be relatively simple, as they can sign up online and drop into local shops to hand over the £5 charge.

But make one small mistake – for example, a tiny error on a registration number – and the fleet manager is suddenly thrown into a sea of paperwork.

One fleet operator told us: ‘I recently received two penalty charge notices for the London congestion charge that were 12 months old. When this was queried, I was told that the authorities have up to six years in which to claim these fines. But strangely, we have only 14 days to pay before penalties apply.’

Taxes and regulation

BY last year, the cost of red tape to British Business had risen to £20 billion, according to the British Chambers of Commerce.

But an estimated 40% of that bill was generated by European rules and regulations.

Among them was carbon dioxide-based benefit-in-kind (BIK) taxation for company cars, which was created after EU countries signed up to an agreement to slash emissions of carbon dioxide.

As a result, the paperwork facing fleet managers to ensure vehicles are taxed correctly has risen massively.

Before the introduction of the new tax, drivers paid tax based on the P11d value of their cars, defined by three different business mileage bands.

So for those covering fewer than 2,500 miles, the tax band was 35%, between 2,500 and 17,999 it was 25% and over 18,000 it was 15%.

This encouraged drivers to cover extra miles to reduce their tax bills, so the CO2-based system was introduced. This started with 21 bands just for petrol cars. Then a 3% supplement for diesel cars added a further 21 bands. Then, cars that achieved the Euro IV standard were exempt from the 3% penalty.

After that, discounts were introduced for alternatively-fuelled vehicles and, of course, they were different depending on what fuel was used.

In total, the potential combination of tax bands fleet decision-makers had to wade their way through each time a new car arrived on fleet was approaching 100.

A spokesman for the British Chambers of Commerce said: ‘Ever-increasing red tape is the last thing that firms need.’

Insurance

A PAN-European bid to tackle car crime has led to a sudden increase in the workload of fleet decision-makers and the threat of fines for the industry totalling millions of pounds.

Fleet News revealed earlier this year that more than 10,000 fleets are facing the threat of criminal prosecution for failing to register their vehicles on the Motor Insurance Database (MID), with the database’s head claiming fleets had undermined the effectiveness of the scheme.

Companies had to ensure that details of every vehicle on their fleets were on the database as part of the Fourth EU Motor Insurance Directive by January 20 last year.

The database was created as part of a major anti-crime initiative aimed at reducing the problem of uninsured driving, which the MIIC estimates costs UK motorists about £600 million a year.

Fleets have complained that the database is difficult to access, time-consuming and prone to errors.

Safety

A growing focus on fleet safety is set to add a new burden to the amount of official red tape fleets have to deal with. While all companies need an audit trail to show internally that they are meeting their duty of care to employees on the road, the growing Government focus on fleet safety will have an impact.

One of the most likely areas could be the expansion of the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR) to include accidents in company cars and vans. This would require an official report to be created for the authorities every time there was an injury accident involving an employee in a vehicle on business.

Already the Health and Safety Executive has published Driving at Work, a guidance document that recommends more than 100 areas where fleets could take action to improve safety.

Experts say this will form a benchmark for police investigating if a company has effectively met its duty of care to fleet drivers.

Money laundering

MONEY-laundering regulations that threatened to have a major impact on the motor auction industry came into force on March 1.

HM Customs & Excise has aimed to make it more difficult for criminals to launder money.

Under the proposals set out in a European Directive, businesses accepting large amounts of cash for goods or services could face increased administrative burdens.

The regime affects High Value Dealers (HVD), defined as any business that has a policy of accepting in cash E15,000 (£11,000) or more for goods for any single transaction.

These companies must register with HM Customs & Excise. It is designed to help ensure businesses comply with their responsibilities under anti-money laundering laws.

Customs is responsible for the supervision of money laundering controls at HVDs and has the power to inspect premises and records to ensure firms understand responsibilities and comply with the law.

New policies and procedures come under the acronym CATCH: Control your business by having anti money-laundering systems in place; Appoint a specially-nominated officer; Train your staff; Confirm the identity of your customers; Hold all records for at least five years.

Are you being swamped by red tape? E-mail fleetnews@emap.com with your story, or log on to www.fleetnewsnet.co.uk and click on the ‘Rip-up Red Tape’ logo

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