Yeah, all a bit confusing.
And while Business Motoring will guide you through these issues, you might want to take advantage of small business fleet consultancy.
Being offered by Fleet Evolution – a member of the Leasing Broker Federation – the free consultancy is available during August and September.
Fleet Evolution Managing Director, Andrew Leech, said:
“I’ve met with a number of small businesses recently that are totally confused by the new legislative changes around the OpRA rules affecting salary sacrifice car schemes.
“We also have the issue of WLTP and the CO2 gap that is becoming apparent between the correlated values under the old NEDC regime and those under the new WLTP test.
“Many small businesses we have spoken to are unaware that the new WLTP tests will apply to all new car production from September and that, as a consequence, their drivers could face increases in their CO2 emissions-linked company car tax bills because of the discrepancies between the old and the new tests.”
The lack of knowledge around emissions testing was similar to that with the new OpRA rules governing salary sacrifice car schemes, he said.
“There seems general confusion over what OpRA means for salary sacrifice and we typically find current policies woefully out of date,” said Leech.
From April last year, employees entering into new salary sacrifice car arrangements pay benefit-in-kind (BIK) tax on a new calculation of the cash equivalent of the car. Where the car is an Ultra-Low Emission Vehicle (ULEV), with an emissions rating of 75g /km of CO2 or less, there is no change.
For other vehicles, the cash equivalent is the higher of the current emissions-based calculation or the gross salary surrendered. This means effectively that, while ULEV vehicles are completely unaffected, most low to mid-range emissions vehicles will only see minor changes.
“In the overwhelming number of cases, there has been little or no increase in the amount that employees pay for their new cars and salary sacrifice should continue to feature as a valuable employee benefit going forward. However, for many small businesses, this message does not appear to be getting across,” said Leech.
He continued: “So, during August and September, we are offering free fleet consultancy for HR, fleet and finance professionals within small businesses to help provide guidance on these key issues.
“Our background of expertise in fleet, IT and HR allows us to offer advice and identify opportunities across a number of disciplines. And we will go through a small business’s current strategies and policies with them, recommending any changes that we identify.
“Every consultancy will generate a report for the business to take action on instantly. Or if they prefer, they can learn how we can help them implement new policies, but with absolutely no obligation if they prefer to continue do it inhouse,” he said.