As we start the New Year I have had a number of colleagues, friends and customers ask me what will 2017 bring and how are you doing? Well… PVS is growing we get another new recruit on the 30th January, Kelly will be supporting me on our procurement activity and supporting some of our Fleet Management customers. At PVS were very lucky to win the New Business of the year award within Somerset and I am delighted with the way we are working with our customers and importantly we are gaining new business as a result of our hard work completed.
Moving onto what will 2017 bring about…
A lot of changes are going to happen post the Autumn Statement yet to be fully ratified until they become law on the 1st February but below I list what this means as well as some of the changes we know will definitely come about and that I have mentioned before: -
ROAD FUND LICENCE
For all those cars registered after 1st April 2017. It is aimed at making the costs fairer for motorists. These are:
- A standard rate of £140 will apply to all cars from the second license onwards, with the exception of zero CO2 emitting cars where the standard rate will be £0
- An additional charge of £310 per year (total costs £450) will apply from the second license for a period of 5 years for any car with an on the road cost over £40,000. After 5 years the RFL will revert back to the standard rate.
- Cars with an on the road price over £40,000 but which emit zero CO2 will still have to pay the £310 additional rate (total costs £450) for a period of 5 years from the second license, but will revert back to the £0 rate after 5 years.
- Alternative Fuel cars will continue to receive a £10 reduction on RFL rates
It is important that those vehicles where the on the road price is higher than £40,000 are aware of the increased in costs. Typically this will increase the monthly lease costs on these vehicles by £20 - £30 on a typical contract hire arrangement.
FULLY EXPENSED PRIVATE FUEL
For employees who receive this benefit, the benefit charge multiplier will increase by £400 to £22,600 from April 2017. Van drivers who receive fully expensed fuel the benefit charge multiplier increases to £610 from £598.
COMPANY CAR SCHEME
Employees in Contract Hire arrangements (CH) may have their tax cost based on the cash allowance and not the company car ‘Benefit In Kind’ (BIK) charge. Employees therefore, in Contract Hire arrangements, will not automatically calculate their tax liability on the company car benefit charge. – What are the ramifications of this?
- The impact to each employee will differ dependent upon the value of the car allowance chosen and the company car benefit value of the vehicle. There is no change when the company car benefit value is higher than the cash allowance tax and NI charge.
It has been confirmed that from April 2017 ‘salary sacrifice’ benefits, including company cars with a cash alternative, will attract income tax and employers’ Class 1A NI contributions if:
- The amount of the salary sacrificed is greater than the taxable value of the vehicle
- The cash equivalent value of the benefit is greater than the taxable value of the vehicle
An exception has been made for Ultra Low Emission Vehicles (ULEV’s) which the government defines as a vehicle up to and including 75g/km. The decision has also been made to protect cars with arrangements in place before 6 April 2017 until April 2021.
DRIVER BENEFIT IN KIND TAXATION
Jan 2016 - With the next four years witnessing increases in BIK tax:
– Customer current average fleet CO2 = 112 g/km
– 2015/16 diesel emitting 112g/km =20%
– 2019/20 diesel emitting 112g/km =29%
– Diesel will increase 9%, Petrol will increase 9%, Plug in vehicles 10% and 11%
For the customer to prevent their average BIK/ NI tax levels from increasing by 2019/20 they will need:
– average fleet CO2 of 75g/km or below NON diesel
– 50g/km or below diesel
With all this in mind, companies will need to think about how they structure their vehicle policies and below are some work that is being done to bring about Autonomous driving and more EV vehicles to market
- HGV platooning trials in UK 2017
- EV Commercial Vehicles – Ford Custom already being tested
- Manufacturers working on increasing Hybrid vehicles within their model mix
- Park your car without being in it
- Vehicle charging solutions
- VW autonomous EV parking solution
- Highway induction charging
Lots of changes happening within a couple of months and over the next couple of years. With this in mind if this causes any of you some concern or you would like some support then please do give me a call or drop me a line on: -
T: - 01278 550270
M: - 07801472247
E: - Marcus@puddyvsolutions.co.uk
Thanks very much, I would like to wish you all a prosperous and healthy 2017.
Puddy’s vehicle Solutions Ltd