A whole host of legislative and tax changes have just arrived with the start of the new tax year that are threatening to blow you off course. From the introduction of the WLTP and RDE2 testing standards, further tax increases for diesel and plans for multiple Clean Air Zones. Managing this on top of the daily demands of running an efficient vehicle operation can be a struggle.
To help you get your house in order and set yourself up for a highly productive 2018, we've covered off some of the main headlines that you need to be aware of over the coming months.
The only certainty in life is taxes
The new WLTP and RDE2 testing standards are now in full swing. It’s a huge step towards ensuring manufacturers present accurate emissions and consumption figures about their vehicles. It will empower fleets and consumers alike to make better informed decisions in future.
Manufacturers have started to publish emissions figures based on the new standards but, in some cases, the calculations are 20% higher than before. Your company car drivers will be feeling the brunt of these increases through equivalent hikes in the tax they pay on some of the most popular company cars.
Meanwhile, Vehicle Excise Duty (VED) for newly registered diesels is now calculated as if they are in the tax band above, unless they meet the new vehicle emissions testing standards and this is squeezing drivers’ wallets even further.
Add to this the Company Car Tax subsidy for most diesels rising from 3% to 4% in Benefit In Kind (BIK) and it’s easy to understand why you may be inclined to re-evaluate the fuel types you make available in your fleet policy.
Assessing vehicle suitability based on driver profiles and journey types over the coming months will be key. Check out our recent guide to Plug-In Hybrid integration for more information about the benefit of adding these types of electric cars to your vehicle list.
Your drivers can also use our helpful Tax Calculator to see how the tax changes impact them directly.
The true cost of ‘free fuel’
If your drivers benefit from having their fuel paid for by the company, they’ll now pay more tax in order to do so. The Government’s raised the fuel benefit from £22,600 to £23,400. That means, for many drivers, the cost of the tax payable as part of this benefit may be more than the cost of the fuel itself. ‘Free fuel’ then becomes much less attractive.
Meanwhile, the BIK charge for drivers who use their company van for private use has increased for both electric and traditional vans.