We will see a move back towards the conventional business car. Anecdotally, this was apparent in the latter months of 2005 and came about as more companies find the alternative schemes difficult to manage or just as likely, not producing the savings that were planned.
And equally as important, the growing realisation that it can be easier and more effective to operate a health and safety policy that involves vehicles managed directly by the company as opposed to those managed by individuals. On health and safety we are likely to see a further spur with the introduction, finally, of the Corporate Manslaughter Bill.
According to John Humphries on the Today programme, it’s been eight years coming but I, for one, do not expect to have to send it yet another birthday card.
The move to directly operated business vehicles is likely to be accelerated if the changes we foresee in Corporation Tax allowances are brought in.
There will be a serious and meaningful review of the allowances starting later this month that should finally sweep away the present antiquated and highly discriminatory system. The £12,000 ‘expensive’ car limit is likely to go as is the rental disallowance for higher priced vehicles.
The BVRLA is arguing for these to be replaced with a CO2-based system of allowances where the more polluting the vehicle, the higher the disallowance and with clean technology vehicles carrying tax allowances of greater than 100%.
While talking about tax matters, the concept of multi-year Vehicle Excise Duty is likely to finally make its appearance. Despite the protestations of the Confederation of British Industry (CBI), which fails to understand the advantages of such a scheme to the industry, I believe that we will see, following the conclusion of discussions at the Treasury, an announcement and hopefully, a launch date. As they say, watch this space.
While plainly regulation will play an ever-increasing role there does seem to be in Government an increasing awareness of the vitally important role that business cars play in the commercial life of the UK. With that in mind, we shall be monitoring closely any proposals that arise following the publication of the second evaluation of the CO2-based benefit-in-kind assessment.
The review has been completed and will be published shortly. If there are changes to be made as a result of its findings, we will be arguing strongly for a three year, or more, lead-in time in order to accommodate existing contracts. It would be plainly unfair on the drivers affected to do otherwise.
While talking about the business car I should mention the VAT on fuel bought by employees for business purposes. We will shortly see the full detail proposed by HM Revenue and Customs (HMRC) for reclaiming this VAT but there has been far too much inaccurate speculation surrounding what, in fact, will be a very small change in regulation. HMRC will monitor these business fuel VAT reclaims, as it does with all VAT matters, but it will do so with a light touch.
2006 will also see the EU Commission outlining the possible changes required for Euro V emission standards for cars. It’s our contention that the Government should provide significant incentives to bring forward the take-up of the technology and speed its introduction so that the industry can help bring new, less polluting vehicles as soon as is practicable.
So, it would appear that 2006, like all other years in the fleet industry is going to be a busy one. But it is a year that I’m looking forward to – some ongoing opportunities, some new ones and some new challenges. It could be a very good year.