Consultancy Expense Reduction Analysts (ERA) warns that, in 2013, the industry will once again have to deal with HMRC business mileage audits, duty of care and rising fuel costs challenges.
In addition, it has to cope with the upcoming CO2 legislation, which adds another level of pressure and complexity at a time when the economic downturn shows no signs of relenting.
ERA noted that the CO2 emissions legislation comes into force in April 2013 for writing down allowances and lease restrictions: ’Every company car over 130g/km CO2 emissions will face a restriction on the amount that can be written down for tax purposes. Regardless of whether you buy or lease your company cars, this will affect the overall cost of these cars. In addition, the financial element of contract hire leases will have a restriction of how much can be offset against corporation tax.”
In light of this ERA urges fleet managers ensure they amend their car choice policy and set a maximum CO2 emission of 130g/km.
In terms of business mileage, the consultancy pointed out that HMRC has been auditing business mileage claims procedures to ensure they are robust and not open to inflated claims. HMRC is actively looking at business organisations and, if the private/business mileage split recorded by your drivers is more than 40/60, then you are at risk of an audit by HMRC. As a result of this companies should ensure that mileage auditing procedures are robust and accurately audited.
“It is believed that as many as one in three road fatalities/serious injuries each year are from business mileage journeys. While there is no legislative requirement for business to report at work driving incidents, it is believed that responsible employers should adopt vigorous procedures to record such incidents as ’RIDDOR’,” ERA added.
“Business fleets have just faced one of the toughest periods in recent memory, but what concerns me is that many organisations aren’t fully prepared for next year,” explained Sean Bingham, principal consultant at ERA.
“But relying on cost cutting isn’t sustainable, so everyone from the CEO to the fleet manager must recognise the key role they and smarter spending strategies can play, in delivering effective strategies for 2013.”
