THE Association of Car Fleet Operators (ACFO), the premier organization representing UK fleet managers, plans a closer working relationship with the coalition government. Chairman Julie Jenner delivers this special report on delivering long-term stability for business car managers and the company cars they manage.HAVE YOU made a new year promise yet?
No? It’s a bit early, I grant, but here at ACFO we have. Well, we’d describe it more as a long-term goal: and that’s to establish a close working relationship with the coalition government on a number of political issues.
In the past ACFO – the Association of Car Fleet Operators – has enjoyed a dialogue with ministers and civil servants in a number of Whitehall departments, including HM Treasury and the Department for Transport.
While the organisation’s leaders continue to discuss issues with civil servants, our goal that in the run-up to the 2011 Budget on Wednesday, March 23, ACFO will hold face-to-face discussions with ministers on a number of key issues.
The business car manager issues we want to discuss include:
- Advisory Fuel Rates – the business mileage reimbursement rates paid to company car drivers;
- Company car tax rates for 2013/14 and beyond; and
- Guidance on long-term plans for all motoring tax rates.
Advisory Fuel Rates for company cars
New Advisory Fuel Rates came into effect on December 1, 2010. However, with fuel close to record levels and the combination of both a fuel duty and VAT rise at the start of 2011, the majority of rates only increased by 1p a mile; some remained unchanged; while the rate for diesel cars over 2.0-litres was cut by 1p.
According to the AA, however, petrol is close to 12p a litre more expensive than 12 months ago and diesel 14p a litre more expensive.
We want to question the formula used to calculate the rates directly with ministers. The new rates, which are due to be in place for six months, will undoubtedly leave drivers out of pocket.
Company car tax rates for 2012/14
Company car benefit-in-kind tax rates are known for the next two financial years – 2011/12 and 2012/13 – but business car drivers now taking delivery of new company cars remain in the dark as to how much their tax bill will be from April 6, 2013.
Historically, the government has always announced company car tax benefit-in-kind rates on a three-year cycle so drivers know where they stand. However, that routine has broken down. It is a concern that employees are taking delivery of new cars now and have no idea of how much tax they will be paying on a vehicle they will still be driving in 2013/14.
With all car motoring taxes now linked to vehicle carbon dioxide emissions including company car benefit-in-kind tax, Vehicle Excise Duty and capital allowances, it is straight-forward for the government to tighten all thresholds while keeping the tax structure unchanged.
Future taxes affecting business cars
It remains clear that the government is keen to pursue a carbon-cutting agenda. However, due to a lack of face-to-face dialogue with the new coalition government during its first six months in office we are in uncharted territory.
Business car managers will play their part in helping the government achieve its objectives of lower company car CO2 emissions. But, long-term planning is essential for business stability. A significant tightening of rates, for example cutting the capital allowance limit from 160g/km to 140g/km without warning, could cause major problems.
So that’s our new year wish here at ACFO: more dialogue to create a more stable environment for companies and their business cars – whatever the size of your business.
