Fleet News

Fleet News Conference: Risk in Fleet

Experts were in Birmingham on May 15 to advise more than 260 delegates on managing risk.

HMRC discusses AMAP rates with fleet managers

Speaker: Elizabeth Ward
Policy advisor, HM Revenue & Customs

Fleets have delivered their verdict on official proposals for a major change in mileage allowance payments that could spark a radical shift in fleet policies.

Last week, Fleet News exclusively revealed that government tax officials were to ask delegates at the Fleet News Risk in Fleet conference to help them thrash out policy on Approved Mileage Allowance Payments (AMAPs) in a mass debate.

At the event, fleets were presented with three scenarios for the future of AMAPs, the tax and National Insurance-free payments that companies can make to employees who drive their own cars on business, including ECO scheme drivers.

HMRC is looking at three options. One is whether the rates and threshold can be adjusted to better reflect differing costs of drivers using their own cars for business.

The second is changing the structure to encourage drivers to be more environmentally aware and the third looks at aligning the tax and NIC rules for mileage payments.

Elizabeth Ward, policy advisor for HM Revenue & Customs told delegates that there could be a fourth option – do nothing – but the suggested changes were in response to demands for alterations to the rates from fleets.

She added: “We want fleets to tell us if they think this works, or if they think it is overcomplicated. You like the simplicity of AMAPs, but you said it was blunt and felt it could come in line with policies such as CO2-based car tax.”

The proposals have split opinion, although the largest proportion of fleets voted for linking mileage and CO2.

However, Ken Davis, director of Automotive Management, said: “I think you are over-complicating it. Why not make it simple for everyone.”

Sheila Elsby, fleet coordinator for Torex Retail Solutions, said: “How are we expected to accurately calculate CO2 emission figures on these private cars and provide it to you?”

Peter Cakebread, managing director of Marshall Leasing, asked for the government to make sure that the change to AMAP rates was consistent with changes to capital allowances.

Ms Ward said: “We are aware of the need for consistency.”

Elizabeth O’Donnell, an HMRC advisor who joined Ms Ward on stage for the debate, revealed that one option was to just change the rates for drivers in ECOP schemes.

Elizabeth Simpson, director of finance and administration at the Camping and Caravanning Club, warned: “We have hundreds of people who will be affected by any changes. It will be very difficult to manage anything apart from a simple system.”

  • Fleets have until 31 July to comment on the proposals.

    Log onto www.hmrc.gov.uk/cars/amap-ecos.pdf for full details.

    Pay-and-reclaim in spotlight

    Speaker: Gary Hull
    Director of employment solutions, PricewaterhouseCoopers

    Large companies are coming under increasing tax scrutiny from Her Majesty’s Revenue & Customs (HMRC) and the mileage and pay-and-reclaim system in the fleet will be one of the first to come under investigation.

    According to Gary Hull, at PricewaterhouseCoopers, HMRC is investigating fleets in order to ascertain whether firms have proper tax controls in place throughout all departments.

    Mr Hull said nearly all large firms would be getting a visit this year. He said: “HMRC is interested in big companies and they will be looking at P11ds, P46 cars and responsiveness to reviews as well as tax history.

    “Cars and car mileages are now a top 10 target and a major indicator of non-compliance and effectiveness of control procedures within a company. ECOS will be carefully reviewed.”

    Mr Hull said fleets need to ensure their systems are in order. “You must ensure staff have clear guidance on what is expected of them when it comes to mileages and reimbursement,” he said. “Keep mileage rates and reporting under review. Mileage, fuel cards and reimbursement of private mileage can be difficult to administer.”

    ESC saves 400 lives

    Speaker: Matthew Avery
    Crash research manager, Thatcham

    All fleet cars should have electronic stability control, a five-star Euro NCAP rating, whiplash-limiting headrests and have Kitemarked repair standards, Matthew Avery, crash research manager at Thatcham, told delegates.

    “Electronic stability control could prevent about 400 deaths and 3,000 serious injuries on British roads each year, yet UK carmakers lag behind Europe in fitting ESC as standard – in Germany the number is 60% and in Sweden it’s 90%.”

    There are 18 different names for ESC. Mr Avery said Thatcham had a rating system on its website (www.thatcham.org) to show which models had it as standard, as an option or not at all.

    With whiplash accounting for 80% of personal injury claims and costing £1.2 billion with an average recovery time of 13 months, it is one of the biggest costs to business.

    Mr Avery said that choosing cars with effective headrests would reduce those figures and recommended the rating for seats on Thatcham’s site.

    Managing the in-car smoking ban

    Speaker: Andrew Black
    Team leader, Smokefree England

    Every company car driver who might carry passengers while on business is affected by the smoking ban that comes into force in July.

    The message, from Andrew Black, team leader at Smokefree England, confirmed for the first time that most company cars are affected by the smoking ban.

    This means that from July 1, they will need no-smoking stickers prominently placed in their vehicles, with drivers and employers facing fines of up to £2,500 if they fail to comply. The ban follows the introduction of smoking bans in Wales and Northern Ireland. A ban in Scotland, which only affects vans, was introduced last year.

    Delegates heard that private cars used on business could also be affected by the ban if the vehicle was used “primarily” for business.

    Environmental risk - controlling costs and running a green fleet

    Speaker: Keith O’Connor
    Managing director, Fleetsolve

    Only by being able to account for every litre of fuel used can fleet managers truly claim to be running a green fleet.

    Fleet managers need to know which cars are running below optimum, and investigate whether it is a mechanical or driver issue, and take into account hidden costs and future developments.

    Keith O’Connor, managing director of consultancy Fleetsolve, told the conference: “Fleet managers need to be able to communicate the green message, come up with solutions and ensure they are understood by drivers and management and adhered to.”

    And the best place to start is in the fleet office, he added.

    “It’s not only the fleet that needs changing to be more environmentally-friendly. What about your office? Are you working as efficiently as possible and using green practices like car sharing?”

    To help the environment, fleets need to keep an eye on sub-contractors. Mr O’Connor said: “Lead by example to sub-contractors – they should have the same environmental face to customers as your fleet.”

    Road Safety Act: get involved

    Speaker: Tim Shallcross
    Head of technical policy and advice, IAM Motoring Trust

    Fleet managers should make their voices heard in the corridors of power by getting involved in consultations for the various elements of the Road Safety Act that will come up for review in the next two years.

    And the government will listen and react to fleet views, Tim Shallcross, head of technical policy and advice at the IAM Motoring Trust, told delegates.

    The Road Safety Act includes legislation on drink driving, speeding, penalties and licensing, with each part requiring a public consultation.

    Mr Shallcross said: “There’s a lot up for grabs. Keep an eye on the Department for Transport website and if you’re a fleet operator, respond on behalf of your company.”

    He also commended the part of the bill that could mean driver training providers are put in a league table to determine the quality of their service.

    “Some providers are a bit dubious,” Mr Shallcross said, “and a league table would provide a benchmark of quality.”

    As the bill becomes law, fleet managers need to keep on top of the changes. Mr Shallcross said: “Communicate to staff, update handbooks and you’ll keep on the right side of the law.”

    Expect investigation

    Speaker: David Faithful
    Solicitor, Lyons Davidson

    A “creeping culture of investigation” will see fleets subject to police checks, and not only for fatal accidents.

    With legislation meaning that police can stop drivers for talking on mobile phones, or eating and drinking while driving, the next stop for police will be the managing director’s office to see what the firm’s policy on at-work driving is.

    David Faithful, solicitor at Lyons Davidson warned: “When the police ask your MD what processes the company has in place with regards to work-related road safety, most will have no idea.” He added. And for the police, that’s a tick in the box, and means they can seize vehicles, health and safety records, computers and interview your staff.”

    Safety from the top down

    Speaker: Nick Purkis
    Deputy group insurance manager, Pickfords

    Such is the culture of safety at-work driving at removals company Pickfords that its chief executive personally checks the driving licences of the management board.

    And creating such a culture that is led by example from the top down can be done with very little cost, Nick Purkis, deputy group insurance manager for Pickfords, claims.

    Mr Purkis said: “If you’re going to have a policy, staff have to follow it. Expensive gadgets will not stop drivers doing something wrong – it will just record them doing it.

    “Only by establishing a culture will you effect change, and it’s very cheap to do.

    “We put everything in writing and follow it up throughout our network. We have four licence checking days every year. It keeps risk management at the forefront.

    “Get the police and local county councils involved – they will help. And police scaring drivers is a lot more effective than managers nagging them.”

    Pickfords also runs a safe driver award scheme, as Mr Purkis explained: “Every driver loves a certificate, so safe driver awards are a fantastic way of ensuring they follow your policies, and those that don’t get one don’t like the ribbing they get from colleagues.”

    Mr Purkis added that when drivers understand that you are doing it to ensure they are safe, and it’s not about saving money, you get natural compliance.

    How are they driving?

    Speaker: Tracey Young
    Fleet manager, Arval

    It’s not the miles your drivers drive, it’s the way they drive the miles. That’s the mantra of Arval’s fleet manager Tracey Young, who has spent two years on a quest to ensure her fleet is as safe as it can be.

    Ms Young said that only by introducing safer driving practices, getting full support for it and then sticking to it 100% can the policy be successful.

    She said: ‘Cultural change is key. You must adopt road safety as a core element, and communicate, educate and implement.

    “But only by sticking to the policy will it truly work. Arval has a rule that employees can only drive for two hours before a break.” Ms Young said that if that means they cannot do as many appointments, then line managers have to accept it.

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