Good fleet management has the potential to increase operational efficiency and bring significant cost savings for businesses. Fleet managers making better use of their vehicles, employees and operations can improve fleet efficiency and ensure their business makes the most of improved efficiencies.

The key to effective fleet management is recognising what “effective” really means. To some businesses fleet management is a function absorbed into other roles and given an ad hoc status and scant appreciation. Inevitably this leads to a skewed approach that negatively impacts on fleet efficiency.

There are many costs directly linked to fleet management and these are all fundamental to any successful organisation. For this reason, the first step any company should make with regards to its fleet management is to ensure that it is established as a fully established functional department within the business.

Clients, on average, can see an 18% reduction in their fleet costs from an effective fleet management system, according to the managing director of fleet management provider Total Motion. Once the function is established, ensuring fleet management is effective and generates cost reductions, is down to managing the variables within a cohesive fleet management system. Those variables are people, vehicles and operations.

Let’s take a look at each variable to see how dedicated management can help to reduce costs.

Fleet cost savings from managing people

When managing a fleet you need to have complete visibility of where your drivers are located and what they are doing. A business investing in software to monitor driver behaviour can gather driver and vehicle data which help to form opinions and future policies. This can lead to training opportunities on efficient driving techniques to save fuel costs and where and when to refuel.

GPS software can also help the driver with quickest routes and how to avoid traffic congestion and accidents, all leading to better fuel management, less downtime and more efficient operations.

From a compliance point-of-view, risk assessments, health and safety training, insurance and licence checks can all result in operational cost savings and also a reduction in fines, delays and administrative costs.

Fleet cost savings from managing vehicles

Fundamentally you need to assess whether you have the right vehicles for your operations. Do you have too many? Are they the right type of vehicle for the jobs they are doing? Are they designed for long haul journeys or short journeys? Have they been correctly adapted for your purposes? Have you considered age and depreciation? Are they roadworthy and safe? Are tax, insurance and vehicle MOTs up-to-date?

Tracking data can highlight whether vehicles are cost effective to run and whether you can achieve better miles-per-gallon (MPG) from other vehicles, or by converting your fleet to electric vehicles. You can also look at funding models for your vehicles.

Perhaps it is cheaper to lease your vehicles as always driving newer vehicles with better fuel efficiency, better on-board tech, better reliability and less fleet maintenance costs can be far more cost-effective. It may also be easier financially for the business, you can better manage monthly costs through leasing and the business won’t have a depreciating asset on its books and therefore no concerns about a re-sale value.

Fleet cost savings from managing operations effectively

First and foremost you need to look at whether you can cut out unnecessary travel from your day-to-day activities. While drivers can be advised on ways to reduce fuel consumption through fuel efficient driving, one of the key factors with a company’s vehicle fleet is ensuring jobs are managed effectively. This means organising multiple drops or visits on one journey, without having to return to base. Can your fleet vehicles do collections on the same journey as deliveries? Driving back with an empty vehicle is a business cost, so is there a way this can be avoided?

A better use of technology can mean meetings are carried out using inter-connectivity. This immediately reduces travelling time considerably and results not just in reduced fuel usage, but also a reduction in vehicle wear and tear and a better utilisation of employees, i.e. they can be doing something more productive than spending unnecessary hours on the road. In all cases, data on the miles travelled can be collected and analysed to support these decisions and enhance fleet productivity.

A fully-functioning fleet management system requires hierarchical support and needs to be acknowledged as a key function within a business. Once it is given this status, critical costs can be properly managed, with decisions backed by accurate data, and savings through reduced costs throughout the entire fleet are there to be made.

The post How Effective Fleet Management Can Reduce Your Business Costs appeared first on Real Business.

Buying a van means buying a vehicle that doubles as a storage and enhanced transportation option, as well as an advertisement for your business should you choose. For many, it’s an important logistical factor that opens up a range of possibilities that can take your business to another level. But what if your current cash flow doesn’t necessarily allow for the purchase?

In this article, Real Business will go over the tax liabilities of a business van, as well as tax reliefs you can take advantage of, sole trader and self-employed van finance options, the types of work that benefit most from investing in a van, and more.

Methods Of Purchasing A Business Van

Buying A Business Van

To buy a van outright means buying the van in one lump sum and owning it as a business asset. This allows you to offset the capital allowance of the van against profits you make, reducing your tax liability. Capital allowances exist precisely for this reason – to allow a business to enhance its productivity and efficiency, thereby stimulating the economic growth of the country. The extent of these tax benefits depends on whether or not the van is solely a business investment, or if it’s used outside of the business. If it’s the former, the van will likely have 100% of its cost deducted from profits via an annual investment allowance.

If you are unable to buy the van due to a lack of finances, consider lending options, such as a bank loan. Of course, with any big loan, we would always advise getting professional advice.

The downside to buying a business van outright is, of course, the upfront cost. How you source the capital is up to you, otherwise, you may have to find an alternative method.

Renting A Business Van Via Monthly Payments

This method, of course, cannot be counted as buying a van at all. Instead, you pay monthly payments to use the van over time. Some deals involve allowing you to purchase the vehicle at the end of the rental period, but otherwise, this means that the van is not the property of your business, but the leasing company. Whilst you are liable for damages, you may not be liable for many, if not all, of the maintenance costs.

Furthermore, it’s worthwhile pointing out that there are likely to be additional costs if you go over any agreed mileage rates, and these can be quite steep to protect the vehicle asset costs.

Leasing To Buy A Business Van

This is a combination of the two methods above – you can lease the van initially through this method until the end of the rental period, allowing you to purchase it at that point. This is a good option for those who do not have the capital but know they will need the van for a longer period.

How Does HMRC Classify A Business Van?

How HMRC classifies your business van depends on its status and intended use. If a van is being used for nothing other than business purposes, there will be no personal tax liability applied. But if it is also assigned for personal use, much like a company car, it will be considered dual purpose – prompting a proportional tax application. It’s worthwhile to note that there could be legal consequences for claiming it solely as a business asset but then using it in personal journeys.

Limited companies ‘owning vans’ are not subject to the same personal tax rules.

Tax Rules For A Business Van

As we’ve outlined before, when purchased as business expenses, assets like a business van can be written off as tax relief. This applies to both sole traders, including self-employed individuals, and limited companies. A limited company, however, will have to pay company van tax. In both cases, tax relief can be applied for, and the reverse is true that personal use has to be declared.

VAT On A Business Van

If you are VAT registered at present, you can reclaim VAT paid on your van. The amount depends on the value of the van itself, bearing in mind that the standard rate is 20%. Keep all invoices and receipts for the van in the event of such a claim.

Insurance Considerations

Insurance for a vehicle is a very handy thing, as it protects you from damages that you may or may not have caused, depending on the level of cover. Insure your van for its market value, first and foremost, not its replacement value – and ensure that it’s covered for all activities you plan to undertake. If you are going to be carrying passengers then you will need to make sure that you have passenger liability insurance.

Advantages Of Fleet Insurance

If this is your first business vehicle, likely, you’re not going to need another anytime soon. That being said, if expansion is a strong possibility, or this is a subsequent business vehicle, consider fleet insurance. As the name implies, it covers a fleet of business vehicles as opposed to one in an overarching policy. This is useful for nothing else if not pure convenience and streamlining.

Final Thoughts

Buying a van for your business means enhancing overall productivity and streamlining business ventures. Understanding the tax implications and tax benefits available allows you to plan for expansion in a much smoother way.

Once you have considered all of these factors, you can then start to look at the different finance options available to help you spread the cost of buying a new van and compare van insurance quotes to get the best deal for your business.

FAQ: What type of work requires a business van?

• Courier businesses – The storage space allows for more items to be moved at one time, enhancing productivity.
• Construction – A foundational part of construction is the transportation of base materials.
• Domestic improvement/repair businesses – White goods repair, painters, decorators, and electricians can probably all justify the benefits of at least a small van to operate more effectively in their chosen trade.
• Mobile beauty and grooming services – A van is the perfect way to transport your mobile beauty and grooming equipment to and from appointments.
• Food delivery services – Some of these vans can be modified to keep things even cooler but either way, transporting larger amounts of food, cannot be done in multiple trips. It usually needs to arrive in one run.

The post Buying A Business Van As A Sole Trader – A UK Guide appeared first on Real Business.

In the dynamic world of international trade, efficiency is paramount. As British businesses expand their reach across the Channel, navigating the complex terrain of pallet shipping is crucial. This step-by-step guide, provided by Barrington Freight – a renowned UK Freight Forwarder, will illuminate the most effective strategies for maximising efficiency when shipping pallets from the UK to France. The specialist expertise of Barrington Freight in commercial B2B freight shipping and their proud association with professional bodies like BIFA and FIATA, ensure this guide is comprehensive and authoritative. Delve in to unlock valuable insights and strategic solutions that will streamline your shipping processes.

Understanding Freight Types: The Nuances of Groupage, Full Loads, Part Loads, and Express Freight

Delving into the intricacies of freight shipping, it is essential to comprehend the different types of loads and their respective utilities. Groupage or consolidated loads amalgamate shipments from multiple exporters into one consignment. This optimises space usage, reduces cost, and is an ideal choice for small to medium-sized businesses or low-volume shipments.

Full loads cater to larger consignments, where the entire capacity of a trailer is utilised for a single consignor. This facilitates faster delivery times, as the freight is not subject to multiple loading or offloading points. Part loads, a hybrid between groupage and full loads, offer flexibility by accommodating larger shipments without monopolising the entire capacity of the vehicle.

Express freight, the fourth category, is the cornerstone of expedited shipping. This type of freight prioritises speed, with dedicated resources ensuring swift and punctual deliveries. The strategic selection of these freight types can significantly augment your shipping efficiency, aligning it with the operational goals and budgetary constraints of your business.

In addition to selecting the appropriate freight type, a thorough understanding of their respective advantages is also necessary. These load types, when chosen wisely, can bring significant economic and operational benefits. They can lower your shipping costs, improve delivery times, increase shipment security, and enhance customer satisfaction. It is this deep understanding of load types and the strategic utilisation that distinguishes seasoned freight forwarders like Barrington Freight and enables them to provide a premium, efficient service to British businesses shipping pallets to France.

Strategies for Efficiency: Mastering Road Freight from the UK to France

Road freight, the exclusive modality employed by Barrington Freight for shipping pallets to France, is efficient, reliable, and versatile. To maximise efficiency in road freight, strategic planning and execution are key.

Load optimisation is paramount. By effectively stacking and packing your pallets, you can maximise the utilisation of space, reducing the number of trips required, and thus lowering costs and carbon footprint. Employing technological solutions, such as GPS tracking, can provide real-time monitoring, helping to prevent delays and enhance the security of your consignments.

Understanding customs procedures and ensuring accurate documentation can expedite the process, mitigating potential hold-ups at the border. Furthermore, partnering with freight forwarders like Barrington Freight, who possess an in-depth understanding of the European logistics landscape, can provide invaluable guidance and support in navigating the myriad regulatory frameworks and administrative procedures involved in international shipping.

Additional efficiencies can be obtained by timing shipments to avoid peak traffic periods, and by choosing the most direct routes. Attention should also be given to the loading and unloading processes; efficient procedures here can significantly reduce handling times. Furthermore, maintaining a consistent line of communication with your freight forwarder and being responsive to their requirements and updates will facilitate a smooth shipping process. The expertise and experience of a reliable freight forwarder, such as Barrington Freight, in managing these various factors can prove instrumental in achieving maximum efficiency in your pallet shipping operations from the UK to France.

Efficiency in pallet shipping from the UK to France is not only a beneficial attribute but a necessity that can profoundly impact your business’s bottom line. It’s an endeavour that requires a clear understanding of freight types, a mastery of road freight strategies, and a professional partnership with a trusted specialist. British businesses can significantly improve their shipping processes by harnessing this knowledge and leveraging the right support. 

The role of a trusted partner such as Barrington Freight, a global B2B freight shipping specialist with a reputation for expertise and professionalism, is truly invaluable in this endeavour. By partnering with such an expert, you gain access to industry-leading insights and best practices. Equipped with this knowledge and robust support, British businesses are well-prepared to embark on their international trade voyage. They can confront and conquer the challenges that lie ahead, achieving their logistics goals, and succeeding in the competitive global market. The journey towards maximising efficiency in pallet shipping begins with understanding, followed by strategic implementation and constant optimisation.

The post Maximising Efficiency in Pallet Shipping: A Step-by-Step Guide for British Exporters to France appeared first on Real Business.

Are you looking to buy an electric car through your limited company? Electric cars can provide tax and financial benefits for limited company owners, but there are a few things you should keep in mind before making your purchase to ensure that you’re making the most of the grants and finance schemes available.

In this article, we’ll take a look at some of the key considerations when buying an electric car through a limited company so that you can be sure that you’re making a well-informed and sensible financial decision for your company and staff.

Here are 9 things that you need to know when buying an electric car through a limited company: 

1. You can get a grant for a discount on the price of some brand new low-emission vehicles. via the government’s Plug-in Grant, which offers up to 35% towards the cost of a new qualifying vehicle including cars, vans and motorcycles when purchased through a registered dealership.
2. The Office for Zero Emission Vehicles (OZEV) runs a Workplace Charging Scheme. This voucher-based scheme provides support towards the up-front costs of the purchase and installation of electric vehicle charge points at your workplace. The grant covers up to 75% of the total costs of the purchase and installation of EV charge points (inclusive of VAT), capped at a maximum of £350 per socket and 40 sockets across all sites per applicant After applying using the online application form, successful applicants are issued with a unique identification voucher code by email, which can then be given to any OZEV-authorised commercial ChargePoint installer.
3. VAT can be reclaimed on any car purchased for business use only, whether it is electric or otherwise. This effectively reduces the cost of the car by 20%, making it a more affordable option for business owners. You can also claim back the VAT on the cost of charging the vehicle too. Remember for HMRC purposes a commute between home and office is counted as personal rather than business travel.
4. In comparison, if you decided to lease an electric car instead of purchasing through your company, you would be able to reclaim 50% of the VAT from the lease payments, even where there is some personal use. If leasing a car that is 100% used for business, then 100% of the VAT can be reclaimed.
5. Limited companies can claim 100% first-year capital allowances on electric cars. This means that you can save money by deducting the entire cost of the electric car from profits before you pay tax (with no cap limiting the value of the vehicle to be eligible for this allowance).
6. If you buy a car through the business, but intend to also use it for personal use this will create a ‘benefit in kind’ and your employees are required to pay some tax on the benefit they receive. The government heavily incentivises the use of electric vehicles with the tax due from employees using an electric vehicle being far lower than petrol or diesel models. From 6 March 2020, the ‘benefit in kind’ has been 0%, this rose to 1% from 6 March 2021, and again to 2% from 6 March 2022 but significantly less than the 37% due for the top gas-guzzling cars.
7. Electric cars are currently exempt from the London Congestion Charge which means if your team works from London or regularly visits the capital for meetings or events, you could save significant fees! They also qualify for free parking in many car parks when using the electric charging points available.
8. Vehicle Excise Duty (VED), more commonly known as road tax, is an annual tax charged to drivers and motorcyclists. Fully electric cars are exempt from paying VED to help support drivers who choose the most environmentally friendly cars and vans.
9. Electric cars require a different type of insurance than traditional cars so you’ll need to make sure that you have the right coverage in place before you buy. Specific things to check include if charging cables are covered if they cause an accident such as a trip or fall if leased batteries are covered, and whether adaptors and charging points are covered for theft and damage too.

So, if you’re ready to go green and make the switch to electric, read on for more detail on the key things you need to know about electric vehicles to ensure you make the right purchase for your needs and business needs!

What Is An Electric Car?

An electric car is a vehicle that is powered by an electric motor instead of a petrol or diesel engine. They are a mode of transport that is becoming increasingly popular, due in part to concerns about the impact of traditional cars on the environment and the high cost of fuel.

Electric cars are efficient, quiet, and produce no emissions but they must be plugged into the electrical grid to recharge their batteries or recharge by regenerative braking. This means that models have a limited range and can take a long time to charge but technology in the EV sector is rapidly catching up with demand meaning charging times are reducing and range is increasing every year.

What Is A Limited Company?

A limited company is a type of business structure in the United Kingdom and is a legal entity that is separate from its owners meaning the liability of its members is limited to what they have invested or guaranteed in the company, not their personal finances. Ownership of a limited company is divided into shares, and shareholders are not liable for the debts of the company beyond the value of their shares. Limited companies are formed by registering with Companies House, and the company name must end with “limited” or “ltd.”

A limited company can be either private or public. A private limited company must have at least one shareholder and cannot offer shares to the public. A public limited company must have at least two shareholders and can offer shares to the public.

There are many benefits to setting up a limited company, including tax efficiency for business purchases like company cars and personal asset protection. Limited companies are also easy to set up and manage, making them a popular choice for businesses of all sizes.

Why Buy An Electric Car Through Your Limited Company?

As the world becomes increasingly more eco-conscious, more and more people are looking for ways to reduce their carbon footprint. One way to do this is to purchase an electric car. While electric cars are often more expensive than traditional petrol and diesel-powered cars, they offer many benefits that make them well worth the investment. Here are just some of the reasons why you might want to buy an electric car through your limited company.

• As above, tax efficiency is another benefit of owning a limited company and this is true when it comes to buying an electric car through your limited company.
  • You can claim back the VAT on the purchase price of the car.
• You can also claim back any expenses related to charging the car, such as the installation of a workplace charger.
• If you use your electric car for business purposes, you can claim back 100% of the cost of fuel.
• You won’t have to pay vehicle excise duty (road tax) on electric cars
• Electric cars are much cheaper to operate as well as produce zero emissions, which makes them much better for the environment compared to conventional internal combustion engines.
• Many local councils offer free parking for EVs, charging points are usually close to the entrance of supermarkets and service stations, and there is no congestion charge for owners of electric vehicles in London. Whilst you will need to apply for the exemption, this can all adds up to a tidy saving in running costs and travel charges when you go electric.
• Electric vehicles only cost around 2-3p per mile to run, which is considerably less than the average 16p per mile for petrol and diesel vehicles, especially when fuel prices are at an all-time high nudging £2 a litre in many places around the UK.

As you can see, there are plenty of environmental and financial incentives for limited companies to invest in electric cars but while electric cars are becoming more and more popular, they’re still relatively new technology. That means the cars available to you may still be expensive and whilst fuel may not be required, the cost of charging stations and batteries when you’re budgeting for your new car can all still add up.

How To Buy A Car Through Your Company

To buy a car through a limited company, it’s not as simple as buying any old car and calling it a business vehicle, you will need to purchase the vehicle through specific business schemes and register it as an asset of the business. Here is what you need to know.

To buy a business vehicle, you will need a business bank account (which is a requirement of all limited companies anyway) and a business account set up with a car dealership or broker. You will also need to provide proof of your company’s existence including its VAT registration number if you have one, and may need to share information on its turnover to meet affordability checks.

Once those logistics are taken care of you can purchase a business car. The difference in the process from here in comparison to a regular customer is that you may have access to special financing options that aren’t available to private individuals, the car purchased will be subject to VAT, and the car will need to be registered in your company’s name, and appropriate business insurance cover will need to be taken out.

When you have paid for the car through your limited company, you may be able to claim back VAT on the purchase price and can usually write off the cost of the vehicle against your company’s taxes.

Claiming Grants For Electric Cars

When making use of the purchase schemes and grants available for business electric car purchases you will need to apply to the relevant organisation offering the incentive and meet their qualifying criteria. The application process usually involves providing evidence that you are a registered business so you should be prepared to find proof of:

• your registered business status and company number
• turnover
• VAT registration number if the application
• Not having exceeded any limits on funding support available within a timeframe
• Needing the funding offered and having relevant permissions from any organisation required. (Consider if landlord permission is needed when installing electric charging points at your workplace).

Environmental Advantages Of Electric Cars For Your Company

As we touched on briefly before, one of the main advantages of investing in an electric car for your company is that they are much better for the environment. Electric cars produce zero emissions, which means they don’t contribute to air pollution or global warming. In addition, electric cars are much more efficient than gas cars and use less energy overall. As a result, electric cars can help your company save money on fuel costs while also reducing your company’s carbon footprint.

Another environmental advantage of electric cars is that they are much quieter than gas cars. This can be a major benefit for businesses that make local deliveries or operate in areas where noise pollution is a concern.

There are many other advantages to electric cars, but these are some of the most notable. Overall, electric cars offer a great way for businesses to save money and operate more efficiently while also doing their part to protect the environment.

If you’re thinking about purchasing an electric car for your business, we recommend working with a reputable dealership or broker that specialises in business car sales. This will ensure that you get the best possible deal on your purchase and can take advantage of all the financial incentives that are available to businesses.

Summary

We hope you now have a good overview of what you need to know when buying an electric car through a limited company so that you can establish if going electric is the right decision for your business financially.

To recap, there is no one size fits all answer, you will need to take into consideration the price of the car, the amount of business mileage you need to cover, whether staff will use the vehicle for personal use as well as business and whether you qualify for any funding.

You will need to consider the total cost of ownership alongside the tax benefits when comparing electric cars to traditional petrol or diesel vehicles and should work with your accountant to see if there are any tax benefits you qualify for when buying an electric car through your limited company. Your accountant can also assist in declaring your purchase of an electric car through your company properly and reporting the correct taxes due.

With a little planning and preparation, you can make the switch to an electric car with confidence and when purchasing through a business, you’ll be able to take advantage of plenty of financial incentives that are available whilst doing your part to help the environment.

The post What To Know When Buying An Electric Car Through a Limited Company appeared first on Real Business.

Your vehicles are a critical part of your business’s operations; from company cars for employees, to delivery vans and specialist vehicles, your fleet helps to keep the UK moving. However, the pressures of legal compliance & legislation, keeping vehicles maintained and on the road can be a time-consuming task, no matter the size of your fleet.

Leasing vehicles for your business might feel like a big undertaking and you may not know where to start, but the benefits could see your business save significant time and money.

Business contract hire (BCH) is a way for business owners to lease vehicles with a low initial outlay and fixed monthly payments, without tying up large sums of capital in assets that will decline in value as they are used.

By leasing instead of buying vehicles outright, small business owners don’t have to handle the risks associated with fleet ownership such as residual values and disposals.

What are the benefits of leasing?

There are many benefits to business vehicle leasing:

Your company reputation – having your own branded fleet of vehicles can enhance your brand’s visibility and reputation, acting as a marketing tool to share your message to customers.

Drive the latest vehicles leasing means you will have the choice of brand new vehicles, straight from the manufacturer, often featuring the latest safety technology, helping to keep your products and employees safe.

Reduces your carbon footprint with many Clean Air Zones (CAZ’s) arriving in cities this year, it could well be worth opting for a green fleet made up of hybrid and electric vehicles, improving your business’s environmental impact and reducing transport waste.

Cash savings BCH is a tax-efficient way for business owners to lease newer, cleaner fleet vehicles that have reduced NIC & tax costs, without tying up large sums of capital in assets that will decline in value as they are used. With fixed monthly payments and the ability to claim back up to 100% VAT, BCH vehicle leasing is a budget-friendly option for smaller businesses.

Reduction in risk for your company by leasing instead of buying vehicles outright, SME owners don’t have to handle the risks associated with fleet ownership such as residual values and disposals.

Hitachi Capital Vehicle Solutions (HCVS) offer fully maintained BCH contracts on their lease vehicles, covering all aspects of servicing, repair and downtime, meaning you will have no unexpected or out-of-pocket maintenance bills through the life of the contract.

Can I get any support with managing my fleet?

Some of the responsibilities associated with managing a fully leased fleet can feel overwhelming for already busy SME owners. HVCS can provide optional add-ins to give a full fleet management support which includes:

” Vehicle maintenance

” Daily rental and relief vehicles for when your vehicles are off the road

” Accident management including vehicle recovery, repair and temporary replacement

” Signwriting

At HCVS, their award-winning fleet solution extends to SMEs looking for a partner to provide insight into fleet efficiency, costs and performance, meaning you can focus less on your fleet and more on running your business.

Effective fleet management can also improve customer satisfaction, enabling goods and services to be delivered in a fast, efficient and safe way. Having external support with fleet management can help your business set KPIs to monitor your fleet’s performance, and improve it going forward.

Am I eligible for Fleet Management services?

Fleet leasing and management services are available to businesses that operate multiple vehicles as well as for sole traders and smaller businesses.

Leasing vehicles doesn’t have to be a big expense, in fact, it can be a flexible and budget-friendly way to run a fleet. There are a variety of funding solutions available for businesses to lease the right type of vehicles for their budget and vehicle preferences.

Whether you need business-critical vans or cars for your employees, HCVS’s experts will work with you to provide a flexible leasing option, tailored to your needs. Click here to find out more.

The post Why your SME should be considering vehicle leasing appeared first on Real Business.

But what exactly can you expect regarding the tax liabilities and tax relief available for buying a car through your business, compared to buying a vehicle personally for business use

Purchasing a vehicle personally

Contrary to popular belief, there are no immediate tax deductions available on the initial purchase price or finance costs when buying a car. In addition, there is no tax relief available on the vast majority of standard running costs, which include servicing, fuel, insurance and tax.

However, you may be eligible to claim a tax-free allowance for business mileage. This business mileage tax relief is calculated in such a way as to also cover vehicle running costs, including general maintenance and depreciation.

As it stands today, UK businesses can charge their companies reimbursement expenses of 45p a mile for the first 10,000 business miles each year for a business car or van. This then reduces to 25p for every qualifying business mile after this initial allowance.

Total business mileage for every year starts on April 6.

Purchasing a car through your business

Tax relief and liabilities when purchasing a car through a company in the UK vary in accordance with the way the vehicle is financed. For example, if you purchase a vehicle through your company using a hire purchase agreement, the only acceptable company expenses are the interest payments. However, your company can also claim Capital Allowances?to reduce the overall costs of the vehicle by reducing taxable profit.

If you choose to lease a vehicle with no intention to purchase it, all monthly leasing costs can be claimed as expenses for your business. Additional levies apply for vehicles with CO2 emissions above 110g/km (2018/19)?or 130g/km for 2017/18 – a flat rate disallowance of 15% of the monthly payments.

Purchasing a van through your business

It’s a slightly different story with vans, which for tax purposes are classified as plant and machinery. As a result, purchasing a van through your business entitles you to a deduction of 100% of the purchase price, under the Annual Investment Allowance regime.

In order to qualify, the van must be used for an insignificant” amount of private use, which according to HMRC would include things like stopping at the doctor’s surgery or pharmacy on the way home from work. By contrast, if the van you purchased was used to go shopping on a regular basis or for general leisure trips, it would not qualify for this 100% deduction.

Comparing car finance deals

Irrespective of your requirements for the vehicle, it is important to compare car finance deals from as many lenders as possible. Use a car finance calculator to establish your budget and requirements, before taking your case to an independent specialist.

Working with an independent broker means gaining access to the widest possible network of specialist lenders across the UK. It also opens the door to the kind of independent advice and consultancy you wouldn?t receive from any specific lender directly.

Particularly where vehicles for business purposes are concerned, tax liabilities and relief can be a complex subject. In order to ensure you make the best possible decision for your business, it’s advisable to speak to an experienced specialist, before deciding which way to go.

The post Can a car be used as a business expense appeared first on Real Business.

For any business that’s dependent on one or more vehicles, commercial vehicle funding is often the only realistic option. Whether you’re setting up from scratch or in need of an urgent vehicle replacement, delays can result in costly downtime.

But where can you turn if your credit score simply isn’t up to scratch” If your application has already been rejected elsewhere, what are your chances of qualifying for a commercial vehicle loan?

Beyond the high street

Contrary to popular belief, qualifying for commercial car finance with bad creditcan be surprisingly easy. It’s simply a case of knowing where to look, which means setting your sights beyond the high street.

Most mainstream lenders limit their vehicle finance services to unsecured personal loans. If you don’t have a decent credit score, you’re immediately counted out of the running. By contrast, commercial vehicle finance specialists offer a more dynamic range of options for buying or leasing business vehicles.

Even with a poor credit history, there’s still every chance of qualifying for affordable vehicle finance.

Alternative options to traditional high-street loans include the following:

Hire purchase

Hire purchase is the number-one choice for vehicle acquisition among private and business buyers alike. A deposit is payable at the beginning of the term (usually around 10%), after which an affordable monthly payment is made over a period of two to four years. The customer is transferred ownership of the vehicle at the end of the term.

The main benefits of hire purchase for business owners are flexible and affordable monthly repayments, the guarantee of vehicle ownership at the end of the term and the elimination of credit checks from most application processes.

Personal contract purchase

The personal contract purchase agreement is a popular alternative to the traditional hire purchase contract. Most of the transaction works in the same way, though the end of the repayment term presents the borrower with three options:

1. ?Pay a final ?balloon payment” (established upon signing the contract) to take legal ownership of the vehicle
2. “Continue paying the same monthly repayments and upgrade to a newer or different vehicle
3. ?Hand the keys back to the service provider and walk away with nothing else to pay

The biggest benefit of a PCP agreement is monthly repayments even lower than those of a higher purchase contract. Some also appreciate the flexibility of being able to choose what to do with the vehicle at the end of the agreement. And again, it’s rare for poor credit to stand in the way of a successful PCP application.

Leasing?

The third most popular option amongst UK businesses is to lease the car (or cars) they require. Initial deposits are payable at the beginning of the term, followed by a series of affordable monthly repayments. The difference with leasing being that there is no option to become the legal owner of the vehicle at the end of the term.

Nevertheless, leasing a vehicle can result in monthly repayments up to 60% lower than those of a hire purchase agreement. Unbeatable deals may be available for businesses looking to lease multiple vehicles, with no specific restrictions placed on poor-credit applicants.

Independent broker support

Once again, the key to securing affordable vehicle finance with poor credit lies in knowing where to look. Conventional banks may decline poor credit applicants outright, but there are alternative options to explore.

Simply contact an independent broker or use a car finance calculator to determine how much you can afford and ensure you target the most appropriate lenders.

The post Can I finance a commercial vehicle with bad credit? appeared first on Real Business.

The aim of the ULEZ is to minimise air pollution caused by exhaust fumes which contain harmful oxides of nitrogen (NOx) and particulates. The zone will see drivers of cars, vans, and motorcycles that do not meet the required exhaust emissions standard having to pay a daily charge of £12.50 as they drive through central London.

” A higher charge of £100 is set to be put in place for heavier vehicles, including buses, coaches and lorries.

However, it can only be positive for the communities of London to have cleaner air. However, if your business is operating in and around the ULEZ, it is essential that you take the necessary steps to assess what impact the legislation will have on your operations.

Measuring the business impact of ULEZ

Central London is home to around 23,000 SME organisations, many of which must make vital trips in and around the proposed ULEZ, which covers the same area as, although will not replace, the congestion charge.

The impact the ULEZ has on your business will depend on the types of vehicle it uses to make the necessary trips.

The European emission standards are the benchmark by which vehicle emissions will be measured in the new ULEZ. These standards are outlined in a series of EU directives, setting out a progressive introduction of increasingly stringent standards.

For SME businesses, where stringent cost management is a daily business necessity, getting to grips with the rules and fees of the ULEZ is imperative if travelling into central London on a regular basis is unavoidable.

We have outlined the following steps to ensure your fleet is compliant with the ULEZ standards, or if not, how you can minimise the fees:

1. ULEZ payments and reconciling expenses

You will need to decide the best way for your business to pay for entering the ULEZ. For example, whether the cost is incurred by employees and claimed back later or paid centrally by your business, particularly if most of the fleet is non-compliant.

There are two main ways to pay the ULEZ charge depending on the size of your fleet:

For businesses with up to 5 vehicles, they can register a payment card (such as an Allstar Plus VISA Card) for AutoPay as a quick and convenient method. An employee can also pay as they go with any acceptable credit or debit card and claim the costs back.

Similarly, for businesses with more than 5 vehicles, they need to register for FleetPay. This method only allows for Direct Debits to be set up. Alternatively, you could use an Allstar Plus Visa Card (whether PAYG or via AutoPay) to enable drivers to manage their own ULEZ payment in a quick and efficient way, providing businesses with better reconciliation of expenses.

2. Do your reading and use the right tools

If your business relies on the ULEZ for its operations, you will need to find out how compliant your current fleet of vehicles is. Transport for London (TfL) has provided a ULEZ Vehicle Checker to assist.

Simply input your vehicle registration, and you?ll find out if your vehicle is compliant with the current ULEZ standards.

3. What is the fuel mix of your fleet

When operating in the ULEZ, you should think about the fuel mix of your fleet, just as much as the vehicle type. Nearly all petrol cars registered since 2006 will be exempt from the ULEZ fee1 including those that meet the Euro 5 and 6 emissions standards.

It might be feasible for businesses to find cheap petrol cars that are ULEZ compliant, although this may not be an option for those businesses that operate larger fleets.

However, redeployment of petrol vehicles could be an option for operations in the central London area.

Alternatively, businesses could consider using Electric Vehicles for regular trips into central London given their exemption from the ULEZ charge. Most hybrids are also exempt from the charge too as they meet Euro 4, 5 and 6 regulations.

4. Navigating around the ULEZ

It is important your business also plans its routes in order to complete essential trips. One option may be for company fleets to be fitted with tracking technology which can provide information on the best routes to take for a given journey, as well as routes to be avoided, that incur charges like the ULEZ fee.

If you’re regularly entering the ULEZ, re-deployment of vehicles for certain journeys could be an option. However, you should also consider putting a company-wide travel policy in place to ensure that employees are aware of the ULEZ rules and regulations and what is deemed as an acceptable business expense when it comes to paying the central London fee.

Now is the time to act

Eventually, ULEZ will have a far-reaching impact across Greater London and the rest of the UK. Although some may feel it won’t affect them given its geographical location or the low frequency of the visits they make to the capital, all businesses need to monitor the ULEZ in London.

Similar schemes are planned for other major UK cities by 2020 including Manchester and Birmingham2.

As a business owner, you should see ULEZ, and the other schemes due to follow, as a real opportunity to future proof your organisation by assessing your environmental impact.

In the shorter term at least, all businesses can make some small changes to their operations and play a part in shaping local infrastructure for the better.

The post Ultra Low Emission Zones (ULEZ) what is the impact for your SME business? appeared first on Real Business.

Fleet management is constantly evolving but the industry is currently undergoing an unprecedented transformation, especially within the UK. The combination of changing mobility habits, macroeconomic conditions, government policy and disruption through technological innovation is driving a shift towards a cleaner, safer and more efficient model of fleet management.

The customer comes first

Firstly, we can best envisage the future of fleet management through the ongoing shift in focus from the asset to the end-user. Customer centricity is defining the service mobility providers now offer – no longer is the vehicle the most important element.

Customers are becoming increasingly demanding and are already seeking access to flexible mobility solutions, especially in urban areas. We are starting to see business travellers incorporating mixed modes of mobility into their regular journeys covering everything from rental vehicles to public transport and on-demand ride-hailing services such as Uber.

The rise in the subscription economy is percolating through to the B2B market too, which has led to the creation of car clubs and sharing services. We expect this to be a large category for growth within the next decade, especially in cities where it may not be economically viable to own a vehicle in future.

Flexible fleets

Customers will want greater choice and flexibility, a behaviour driven by the current economic climate, but a trend expected to continue over the next ten years.

Uncertainty due to Brexit is already affecting business mobility decisions and many companies are reluctant to invest in depreciated assets or longer-lease contracts.

Currently, short and medium-term solutions such as daily rental are already proving popular as fleet capacity can be scaled up or down very quickly and easily as demand requires. Businesses only have to pay for vehicles when they need them, which avoids downtime and unnecessary expenditure as fleets become more efficient.

Mobility suppliers are responding to this shift. For example, similarly to how Uber has grown to become the largest taxi provider without owning any vehicles, Nexus was founded by spotting a gap in the market by connecting business customers to the UK’s largest vehicle supply chain. We achieved this without needing to own any assets, keeping costs lean.

Legislation nation

Decisions like this are also being driven by government policy. The ongoing demonisation of diesel will mean smaller diesel vehicles for everyday journeys will soon be a thing of the past there is still some way to go for hauliers and HGV operators, however. The ban on new diesel and petrol vehicles by 2032 is ambitious but the direction of policy is necessary as we transition towards a cleaner mobility future.

Government plans also mean that all vehicles must effectively be ?zero emission” by 2040. While this requires innovative solutions from vehicle manufacturers, fleet managers will increasingly be considering low-carbon alternatives like electric vehicles (EVs). The creation of Ultra-Low Emission Zones (ULEZs) launching in April 2019 and the introduction of congestion charges are also fuelling this shift for fleet managers operating vehicles in urban areas.

Currently, the main barriers to EV adoption are battery range and charging infrastructure, as well as cost, but once these have been cracked, we can expect to see fleets of EVs transporting people and goods around the country. For business travellers, EV sharing clubs will be the norm in ten years with some suppliers already offering hourly rates.

Likewise, logistics firms and courier companies will operate silent vehicles through the night to fulfil their delivery requirements while avoiding congestion charges.

Innovation and intelligence

Helping to drive these transformations is technology. The proliferation of fleet management software and vehicle innovations have provided customers with the digital capabilities to demand the exact vehicle they want, in the right place and at the right time.

The Internet of Things (IoT) and the connected car will continue to grow in importance. Artificial Intelligence (AI) will continue to be built into vehicles and fleet management processes and one day soon we may be able to summon an autonomous vehicle through a voice-activated assistant. While once the dreams of science fiction films, we are not that far away from this being a reality – although don’t expect this within the decade.

All in all, the future of fleet management can be defined by “usership” rather than ownership. While government policy and economic uncertainty will persist for the short and medium-term, the future of fleet management will be defined by technology and innovation as Mobility-as-a-Service (MaaS) grows in popularity.

Consumers and businesses alike are demanding flexible, multi-model solutions that make mobility more efficient.

Eventually, we will see autonomous EVs being hailed by smartphones but until then, the focus for fleet managers will be to provide the most effective and efficient form of transport.

David Brennan is CEO at Nexus Vehicle Rental

The post What will fleet management look like in 10 years? appeared first on Real Business.

Should I buy an SUV?

Recent years have seen a significant rise in the popularity of SUVs. In the US, sales of mainstream and luxury SUVs more than doubled between 2010 and 2018. In fact, they rose 5% and 7% respectively in 2017, despite overall vehicle sales decreasing by 2%.

It’s a trend reflected on the other side of the Atlantic too. In 2018, SUV sales helped brands such as Volkswagen Group and SEAT increase their overall vehicle sales by 13% and 19%.

The upward trend would suggest buying an SUV is a good decision. So why are SUVs so popular?

The benefits and advantages of an SUV

Enjoy more space

With flexible interior space for passengers or cargo, you can take seven people per trip. This removes the need for multiple trips or vehicles and makes best use of your resources.

Improve fuel efficiency

Most SUVs will give you excellent mileage. In fact, many can achieve over 30 miles per gallon, while retaining the space and other benefits associated with an SUV.

Go off-road

You may not need to go off-road often. But when you do, a few small things make a big difference. SUVs have greater ground clearance and more robust suspension than many other cars. They also enjoy underbody protection and hill descent control.

See more of the road

It may sound trivial, but a higher ride position goes a long way. Not only can you see further ahead, you can often see over other traffic and better anticipate hazards.

The new SEAT Tarraco

Spanish automobile manufacturer SEAT unveiled its new seven-seater SUV?last year in Tarragona, a city known as Tarraco in ancient times. The company’s new flagship vehicle, the Tarraco completes a trio of SUVs, alongside the Arona and the Ateca.

“The introduction of the Tarraco forms part of our £3.3 billion [ £2.93 billion] investment between 2015 and 2019 in the company’s future and the range of vehicles we offer,”commented SEAT boss Luca de Meo. “It completes our family of SUVs, to suit every customer’s need .

SEAT’s vision appears to align with its execution. The firm secured the prestigious Fleet Manufacturer of the Year award at January’s Great British Fleet Event 2019. As SEAT UK Head of Fleet & Business Sales Peter McDonald said, “To win such an esteemed award is an honour. We must thank the Fleet World team and judges for recognising what has been a tremendous year for us.

As the final SUV in SEAT’s trio, the Tarraco is the manufacturer’s biggest yet. The portfolio offering positions SEAT as a quality single-supplier solution for many fleets.

With seven seats as standard, a digital cockpit, full LED lights and a sub-130g/km CO2 average, the Tarraco’s total cost of ownership is particularly competitive.

It is available for business customers to take four-day test drives, along with its entire business range. The 4-Day Test Drive Programme lets company car drivers experience SEAT’s latest cars as they undertake work and leisure activities and understand their unique benefits.

The SEAT Tarraco also falls within SEAT’s new online car-configurator process easymove. The three-step platform makes purchasing a new vehicle more straightforward for business owners.

See the new SEAT Tarraco.

The post What car should I buy” The new SEAT Tarraco might just be the answer appeared first on Real Business.