Fleet News

Fleets increasingly seeking external advice regarding April tax changes, says Arval

Richard Cox, Arval

Fleets are increasingly seeking external advice to work through the implications of new tax regulations that will take effect from April this year, reports Arval.

The vehicle leasing and fleet management company says that the headline changes – affecting benefit-in-kind for drivers entitled to a cash option or a company car, salary exchange schemes and vehicle excise duty – require careful thought and planning.

Richard Cox, senior fleet consultant, said: “In recent years, annual changes to tax affecting company cars have been incremental and signposted some way in advance.

"However, the new changes have been more sudden and, for that reason, caught some fleets off-guard.

“Certainly, we are hearing from a number of businesses asking for expert input which is absolutely the right thing to do.

"Some elements taking effect in April do not always have obvious solutions and, for this reason, we have been asked for help by a relatively large number of vehicle operators.”

As a result of the nature of the changes, Richard added, consultancy services were especially being sought by fleet stakeholders such as human resources and finance departments - as well as from fleet managers themselves looking to understand all of the options available to them.

Cox  added: “The cash option question, for example, is one that is being pondered by many HR managers. There are several tricky issues to consider when making this decision, such as whether individual cash options represent a fair equivalent of a company car, the kind of vehicles that employees are choosing to buy with their cash allowance and more.”

The Vehicle Excise Duty changes, which completely alter the rules for what would previously have been considered low emissions vehicles, could also require expert help, he said.

Cox added: “There are a number of questions arising from the new VED rates but perhaps the trickiest is that for cars registered after April 1, only 0g/km models now attract a zero charge instead of those up to 100g/km, as at present.

"This could affect overall running costs and therefore some fleets are looking at repositioning their choice lists to reflect the change.

“These are issues that fleets are still working through and our consultants have been finding that, while sensible solutions can be found, there is no one-size-fits-all answer.

"It is a matter of sitting down with each and deciding on their individual priorities.”

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