Fleet News

BUDGET BLOG: Fleets set for perfect storm

Paul Lippitt, Principal Consultant at Lex Autolease says:

“Many commentators will be speculating between now and March 21st about what will be in the Chancellor’s Budget Statement and the tax changes that may impact on vehicle fleets.

“One thing we know for certain is the QUALEC threshold is being withdrawn from this April, as confirmed in the March 2011 Budget.

“The new tax year is the real landmark date in this year’s fleet calendar, given that both employers and employees will be affected by changes to the benefit in kind (BIK) charge system for company cars as a result of the decision to lower the CO2 limit for the starting rate of company car tax from 120g/km to 99g/km.

“We’ve said it before and it’s worth saying again. If you’ve not informed your drivers, do so now. They could be paying upwards of £200 more per year. If your business has not accounted for the increased National Insurance contributions, look at mitigating the impact in the short term by encouraging more drivers to opt for sub 100g/km vehicles.

“In many ways, this has all the hallmarks of a perfect storm in the sense that it really exposes rental driven policies which are outdated and increasingly irrelevant in modern fleet management. In particular, it highlights the pitfalls of ignoring a whole life cost approach and as a result paying lip service to significant costs such as tax and fuel which can be minimised through careful vehicle selection. It might be boring, but it’s no less true.”



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