Tag Archive | "business fleet"

The Business Of Cars

With the wet winter we have just had, most people would be forgiven for thinking twice about attending an outdoor event in the UK. Fortunately, for once, the sun shone upon the wide open spaces of the home of British motor racing, Silverstone, for the annual Fleet Show.

This time though the roar of engines came, not from race cars, but from the cars that we all buy. Manufacturers are always keen to sell their products to the general public but there is also the lucrative commercial side of things for those corporate or small businesses who use cars as part of a company fleet.

So it was that Silverstone opened its gates to business users from around the country. Car makers lined up their choicest selections to be viewed and driven. These days industry requires vehicles that can offer impressive fuel economy, low depreciation and affordable servicing.

That’s not the end of it though. Users expect cars to be stylish, well equipped and to offer the sort of low emissions to help mitigate the effects of the dreaded ‘Benefits In Kind’ tax. Officially, BIK are benefits which employees or directors receive from their employment but which are not included in their salary cheque or wages. To the rest of us these are also called ‘perks’ or ‘fringe benefits’ and they include things like company cars. To HM Government it is called a ‘revenue stream’.

The curiosity of this is that it is not the nature of the car that generates a given BIK rate. The amount is based on CO² emissions. Thus a high performance two seater which gets to sixty two miles per hour in under six seconds from a standstill and goes up the road like a scalded cat only attracts a monthly BIK of £223 for forty percent tax payers. Now this is what we’d all be happy to call a company car but it seems unlikely that British bosses will ever see it that way.

FL2 The Business Of CarsThis is why this annual opportunity is so useful. It gives industry the chance to inspect the multitude of auto offerings across the performance and price range. From the luxury brands through to the more popular fleet choices like Mazda or even Nissan’s funky electric Leaf, the cars are there to be seen and, helpfully, to be driven. It also gives business users the chance to consider, for example, contract hire or leasing deals. More and more companies are offering this, with Motorparks being just one example.

The chance to try and buy – and get to drive down the famous pit lane and around Silverstone’s sensual curves – is crucial if the car maker is serious about the business of cars. The Fleet Show also gives the ancillary suppliers and small businesses a chance to tell the world about their products. From admin and IT solutions, electric vehicle charging and automotive technical innovations, finance and fleet management organisation right down to awnings that allow technicians to work outdoors whatever the weather, are all on show to see and discuss. The coffee’s good too.

The 2014 Fleet Show had everything for managing the business of cars. The exhibition and seminar halls were abuzz and the test drives and hot laps in constant flow. In addition to this, meeting, greeting and the chance to network with like-minded people forms the crucial part of what helps the business world go about its business.

FL1 The Business Of Cars


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Employers who provide Employees with Motoring Insurance – The risks….!

Providing motoring insurance to your employees creates various responsibilities and risks.

Risks for the Company

If it’s a company car and the driver is stopped for driving without insurance the company (or an individual within the company) can get a summons for permitting them to drive without insurance. If the company is summonsed it’s a fine. If an individual is summonsed it’s a fine and 6-8 penalty points. If the car belongs to the employee it can result in the company being accused of causing them to drive without insurance.

If the employee is driving for business purposes then they need business use cover. Otherwise they are still driving without insurance if they only have social and domestic cover.

Risks for the Employee

The employee is relying on the company to get it right and make sure the insurance is correct. The driver gets 6-8 penalty points and a fine for using a vehicle without insurance if they get stopped.

Statutory Defence for Employees

If insurance is not in force, a statutory defence is available to an employee in accordance with S143(3) Road Traffic Act 1988 if it can be shown;

1. the vehicle did not belong to him,

2. it was being used in the course of his employment at the time of the offence

3. and he neither knew nor had reason to believe there was not in force in relation to the vehicle such a policy of insurance.

The individual has to prove the criteria on the balance of probabilities. If however he does not fulfil or prove all the above criteria, he will be convicted of driving without insurance.

Special Reasons Arguments

In these circumstances, a Special Reasons argument may be available if to both the employer and the employee if they can show that they genuinely and honestly believed there was insurance in place and that this belief was reasonable.

The full criteria for Special Reasons are set out in the case of R v Wickens (1958). Special Reasons is not a defence but if found, no penalty points will be imposed. The burden is on the defendant to prove on the balance of probabilities that it was reasonable for him to consider he was insured. If the Court does not consider the belief was reasonable, they will impose between 6 – 8 points.

An example of this would be a delivery driver, driving their own van but being employed by a company. Prior to them commencing work, they discuss insurance with their employer and are reassured that they are covered under the company’s trade policy. It transpires that this is only the case if the vehicle is named specifically on the policy. This did not happen, as the employer did not realise, and the police stop the employee for driving without insurance. This would amount to a good Special Reasons for the employee.

Causing An Employee To Drive Without Insurance

If employees do not have insurance, employers also risk between 6 – 8 points for causing or permitting their employee to drive without insurance. Equally, they may have a Special Reasons argument if they can show they genuinely believed insurance was in place. In the above example, the employer would have to show it was reasonable that they did not realise they needed to add the vehicle to the insurance policy. If it was a simple case of the employer not reading the paperwork correctly, the argument is unlikely to succeed, however if the employer was told otherwise by the insurance company for example, this would amount to a good argument.

Types of Insurance Cover

It is not sufficient for insurance just to be in place. The employee must be covered for the driving purpose in question. This depends on the business type and why the employee is driving the vehicle. Some employers for example will allow an employee to take the company vehicle home of an evening and drive back to work the next day. Commuting and business cover is therefore required but the employer would also have to stipulate whether the employee is authorised to drive the vehicle outside of business hours. If agreed, social domestic and pleasure cover is also required. If not, the employer needs to make it very clear that the employee does not have permission to drive the vehicle for this purpose. To avoid potential prosecution, it would be advisable for the employer to provide written confirmation of the position.

If you have any questions or problems in relation to this or any other Motoring Offence Issue then contact Patterson Law.

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The Benefits Of Business Fleet Management

Company cars and commercial vehicles are essential to the running of most businesses, large and small. Fortunately for industry there are specialist companies able to provide business fleet management.Managing a fleet effectively requires a range of services to minimise the risks associated with vehicle investment and, crucially, save money in these difficult financial times.

The best fleet management companies include services as diverse as financing, maintenance, health and safety and, additionally, speed, fuel and driver management amongst many other aspects. This improves efficient and productivity whilst reducing overall costs and ensuring compliance with regulations.

There are various options to the leasing process to suit individual needs. There’s simple contract hire where the vehicles are simply rented or contract purchase offers fixed monthly payments which allow you to manage your fleet expenses whilst offering the chance to purchase the vehicle at the end of the contract by making a single ‘balloon’ payment. There are also leasing agreements and even the option to sell your existing fleet and rent them back from the company. This is a possible solution to cash flow worries.

Many companies today are choosing green solutions and fleet management can help. Whether your needs are for long distance saloons like the Jaguar XF , light commercial vehicles or even electric vehicles, help is at hand. Present rates of CO² taxation and Benefit In Kind legislation ensure that environmental issues cannot be ignored. By utilising the long experience and best practice of business fleet management it is possible to ensure the best green solutions.

It cannot be stressed enough the value of these essential fleet management services, leaving managers clear to concentrate on the core business needs. By leaving day to day fleet activities to the experts means no longer having to worry about breakdowns, servicing and general maintenance like tyres and glass; whilst fleet administration takes over the stewardship of motoring violations ensuring prompt action to reduce penalties and dealing with road tax, V5s, MOTs and parking permits. In short, everything is covered. One less big thing to worry about.

The number of fleet units deployed on company and commercial fleets throughout Europe is growing exponentially as managers realise the value of not having to run a dedicated department. Fleet management is the first and principal step to understanding automotive costs, financing and vehicle selection. The sensible move is to let fleet industry experts take the strain – that means peace of mind in the long run.

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2012 Company Car Tax

This isn’t the most exciting motoring topic in the world but it is important if you happen to drive a car supplied by your employer. Yes, From April 6th the rates of company car tax are changing. Governments talk about simplifying tax but it doesn’t seem to apply here. The tax you pay on a company car is based on a ‘benefit in kind’ (BiK) calculation. Basically this means that your employer giveth and the HMRC taketh away. If, as most people do, you earn more than £8500 per annum, then a supplied vehicle will be taxed. It is worked out thus, and I quote:

“You take the price of the vehicle for tax purposes – known as the P11D value (why?) and multiply it by the ‘appropriate percentage’. That figure is based on the car’s CO² emissions which can be found in the tables published by Her Majesty’s Revenue and Customs”.

Here’s a current example. “For a petrol car with a P11D value of £20,000 and a CO² output of 120g/km, it is 10%”. Doing the maths, ten percent of twenty thousand is two grand. That’s £167 per calendar month to you. There’s different figures for different types of car, petrol or diesel, for example and they range from 0 CO² to 225 and over CO² through no less than 34 tiny increments.

So now that the facts have sunk in, it is time to change them, as Fran Warburton of ALD Automotive points out:

“The threshold for using 10% … is shifting down from 120g/km to 99g/km”.

This means that, in the above example, the amount of tax levied will rise to £250pcm. That’s 87 quid! Warburton added:

“What’s interesting is that drivers of cars which are currently considered tax efficient – those emitting 100-120g/km – are the ones who will feel the most financial pain from 6th April. Their rate is rising by 5% yet drivers of higher CO² vehicles aren’t really being penalised by the changes because their rates are only going up by 1%”.

Many companies and drivers have overlooked the impact of the change which will increase the amount of BiK tax the user must pay, along with the effect on employer’s national insurance contributions. If you think that’s enough bad news, well, here’s some more: even if, as a driver, you are not planning to change your car this year the new rate still applies! It gets worse – there are more increases in the pipeline. Maybe it is time to look at alternative arrangements?

BIG P.S to this: Sneakily, the government – so supportive of motorists when in opposition – have hidden in the recent budget a decision that, from 2015, zero and ultra-low emission vehicles will be subject to BiK company car tax! So much for supporting business and individuals who try to go green!


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