Fleet News

Open-minded approach can keep fleets ahead of tax changes

Hitachi Capital Vehicle Solutions is advising fleets to remain ‘open-minded’ and flexible to their vehicle solutions ahead of the second ‘stability’ budget statement for 2015.

The Government has already outlined benefit-in-kind tax rates through to the 2019/20 tax year which, under current proposals, will see zero-emission vehicles’ BIK rates rise from the current 0% rate to 16% in the next four years.

However, an ‘open-minded’ approach to company car choice lists can allow companies to take advantage of favourable tax rates, especially for low emission vehicles, says Hitachi Capital Vehicle Solutions.

The innovative technology manufacturers continue to bring to the market is increasingly favourable by fleets across the UK, however “utilising new technology should only be the first step”, advises Terry Harvey, head of group tax at Hitachi Capital Vehicle Solutions.

“Fleets should always be looking ahead and reviewing policies to ensure these are as future-proof as possible," he said.

"Four-year cycles may now be common, but a four-year-old car can easily become a costly asset for the driver in the form of higher BIK tax, especially as BIK rates rise.

“New technology may be a viable option today, saving both the employer and employee money, but taxation systems or newer technology can leave it outdated.

"At Hitachi Capital, we continuously review fleet policies, looking ahead at legislation and future products ‘beyond the brochure’.

“We strongly advise fleet operators to adopt this approach with their supplier. Failing to have the support of a forward-thinking and flexible leasing company can be a costly mistake.

"At Hitachi Capital, we continuously look ahead and have adjusted optimum terms and contract mileages to build the best solution, both now and for the future."

Harvey added: “Flexible contracts may also become more viable options for some fleets for the same reasons, but an open mind to fuel type, CO2 caps, terms and mileages should be considered by fleets regardless of size or sector.

"Using a vehicle’s wholelife cost with this approach and an innovative leasing partner is the best way to get the most from a climbing taxation system."

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