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LETTERS to Fleet News’ editor Martyn Moore.

Red tape will increase dramatically

Reading the article “HMRC is asking fleets for help” (Fleet News May 10), I noted the attempt to link these to employee car ownership (ECO) schemes.

Within the organisation I am chief finance officer of, we use AMAPs as our mileage allowance rate for staff using their private cars for business use.

Will the new scheme differentiate between purely private cars and private cars purchased under ECO schemes?

And what about the health and safety aspects of driving an appropriate car for the trip in question, especially when the rates offered encourage using smaller cars?

For organisations such as the company I work for, I can see the level of red tape increasing dramatically. As with many of these environmental comments they manage to ignore the wholelife CO2 cost of the car.

I understand from some reports the CO2 cost of manufacturing/disposing of a car equates to nine years of CO2 emissions.

Therefore a car with an expected life of 20 years rather than 10 years could be more environmentally friendly.

I have read that that 80% of the four million Land Rovers manufactured are still running, which probably gives an average age over the whole population of 20-plus years.

I also seem to remember another survey that took manufacturing costs into account where the Toyota Prius came bottom due to the CO2 costs of manufacture.

CHRIS PARKER
Tex Holdings

Mileage rates should reflect higher costs

I am writing in reference to the article “HMRC is asking fleets for help” (Fleet News, May 10).

  • Scenario one: linking rates to CO2 – this would be an administrative nightmare for employers who would have to keep ongoing records of every car their staff owned with the correct CO2 rating.

    It was a nightmare with the old FPCS system with the matrix of petrol/diesel/cc mix but at least that was fair and you avoided all the record-keeping by paying one averaged rate. If this was to work you would need the facility to pay only one average mileage rate irrespective of CO2 rating.

  • Scenario two: both variants – these can work but clearly the intention here is to reduce the amounts reimbursed to employees and not, as stated, to reflect reimbursement of the actual costs incurred by employees driving for business use.

    With more than 2,000 employees claiming mileage reimbursement, the current AMAP system has worked extremely well for us. There are winners and losers (more losers as you’d expect after the change from FPCS), but it is very simple to operate with minimal admin.

  • I think we should recommend scenario three to reflect higher costs of keeping vehicles on the road – 45p for the first 10,000 miles and 30p thereafter. Any takers?

    GLYN ROBERTS
    Deloitte

    HMRC favoured by one-sided proposals

    HMRC’s proposals to amend the rules are one-sided in its favour, “HMRC is asking fleets for help” (Fleet News, May 10).

    It wants to reduce the payments to the majority of individuals who use their own vehicles on company business.

    Having encouraged many drivers away from company cars by progressive and penal increases in the BIK on them, they now wish to penalise those employees who use their own cars for work.

    The 40p per mile rate up to 10,000 miles, and 25p thereafter has not increased for very many years. All statistics show that most cars cost considerably more than this to own and run.

    Any scheme must reflect the actual cost to the worker of using his or her car as anything less is unfair, penal and oppressive.

    I am led to believe that the tax-free mileage rates paid to government employees using their cars for work are considerably higher than those allowed to the rest of us.

    If this is so, it is divisive and must stop or all employees, irrespective of whom they work for, should be allowed the government tax-free mileage rates.

    We should be looking to increase these tax-free mileage rates to properly reflect the costs borne by employees, not reduce them under the guise of CO2 emission bands. It is vital that HMRC is left in no doubt that it is well wide of the mark with this one. It is also vital that businesses combine to protest in the strongest terms.

    DAVID GREEN
    FCA director, Target Furniture

    Why do we need ECOs?

    I know that some may see this as a fairly simplistic view, but surely the question about employee car ownership schemes(ECO) must be asked: why is it felt there is a need for such contrived schemes in the first place?

    Quite clearly they are designed to obtain a better tax position for the driver and/or the employer, which indicates that at worst ECOs are a form of tax avoidance, or the whole system of charging BIK in the first place is considered too penal and should be revised to reflect the changes over the past five years or more in vehicle technology.

    For reasons best known to the authorities, lean-burn technology was shelved many years ago because of the insistence on the provision of catalytic converters – two technologies that are seemingly incompatible. However, lean burn would have had longer-term benefits for the environment.

    All recent evidence suggests that rather than discouraging drivers from company cars we should be doing the opposite, as it would appear these are the most CO2 friendly and best maintained vehicles on the roads. Is it not time for the worm to turn?

    ROB CHISHOLM
    Managing director, Applewood Vehicle Finance

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