It has been a demanding year for fleet managers. With the COVID-19 pandemic, government lockdown and financially trying times, businesses are facing serious pressures. If that weren’t enough, tax increases are coming in the UK. An unwelcome burden on businesses with delivery, transport and service vehicles.
With that in mind, it’s more important than ever to reduce fleet costs and offset these additional taxes imposed by the state. Learn how digitising your fleet can offset high fleet costs so you can maintain a low company car tax and maximise profits.
What Threatens Your Low Company Car Tax?
There are four main taxes you should keep in mind when considering how you can minimise your fleet taxes.
1. Fuel Duty
Fuel duty has been frozen at 57.95 pence per litre since 2010. However, Chancellor Rishi Sunak is in talks with cabinet to increase fuel duty up to 5 pence per litre by March of 2021. With fuel being the second-highest fleet cost, rising petrol prices can seriously impact your fleet and cut into profits.
How Can You Reduce Petrol Costs?
Vimcar’s Fleet Geo route analytics allows you to plan the most efficient routes, saving substantial petrol and driver resources. Live GPS tracking allows you to identify drivers in real time. This allows you to make quick work allocation decisions, improving your fleet’s turnaround time. Tracking your routes reduces empty runs and gives you the tools you need to better utilise your fleet.
Many drivers don’t realise that idling uses more petrol than stopping and restarting your engine. Vimcar’s GPS vehicle tracker records idling time so you can note excessive idling and make suggestions to drivers.
Phillip Thompson, Company Director of Active Traffic Management, says Fleet Geo has helped him control costs. “I have managed to keep track of fuel and where it’s being spent. I have generally been able to manage my fleet better, with all-round ease.”
Setting up your fleet to achieve a low company car tax doesn’t have to be complicated. Streamlining your fleet efficiency means improved productivity, less petrol, and lower fuel duty.
Know exactly where your fuel is going and download our fuel cost calculator:
Guide: Top tips for how to overcome the 3 biggest fleet challenges
2. Corporation Tax
Businesses may be hit with a significant increase in corporation tax. An increase from 19% to 24% has been proposed. That is a jump of 5%. This hike is particularly tough on small businesses who will have a harder time absorbing the cost.
How Can You Offset Increased Corporation Taxes?
Van theft costs businesses an average of £16,000 every year, making it a substantial hidden business cost. That is the last thing fleet managers need! Vimcar’s Geofencing and Timefencing features set a digital fence around your desired area and establish times when vehicles can be in use. When vehicles drive outside of a designated area or timeframe, fleet managers receive an alert. This allows you to quickly detect vehicle theft with a pinpointed vehicle location that can be shared with police. Paired with Vimcar’s free replacement of lost or damaged hardware, we keep you protected.
3. Clean Air Zones Tax
New legislation aimed at protecting the environment is being introduced throughout the UK with Clean Air Zones (CAZ). Clean Air Zones are government-designated areas restricting high-emission vehicle use. These fees aim to lower emissions and improve air quality. While they’re good news for the environment, they pose a challenge to fleet managers looking to maintain a low company car tax.
London has already implemented a 24/7 “Ultra Low Emission Zone”, in which only ultra-low emitting cars are excluded. Many other local authorities around the UK have been designated including Birmingham, Nottingham, Derby, and Southampton. These fees add up quickly, and businesses need to plan accordingly to avoid high penalties.
How Can I Prepare For Clean Air Zone Fees?
Fleet Geo’s Geofencing feature alerts you when vehicles enter a CAZ. Paired with our reliable route analytics, Vimcar has the tools you need to help plan routes that bypass these zones and avoid penalties. Plus, Geofences indicate when vehicles are back and ready for reloading, which improves turnaround times and optimises profits.
Read more: What is Geofencing?
4. HMRC Tax
Rising HMRC fees have made it challenging to have low company car taxes. While the number of company cars in the UK is falling, company car taxes are increasing. In the 2018/19 tax year alone, the overall company car tax yielded by the government increased by a staggering 11.2%!
Offsetting HMRC Tax
Vimcar’s tracking hardware gives you tools to more accurately record your vehicle mileage, so you can schedule routine maintenance checks on time. Maintaining your vehicles properly extends the vehicle life, preventing expensive breakdowns and business disruptions.
These rising costs make it more important than ever to minimise inefficiencies where possible. GPS trackers are the best way to modernise your fleet and reduce unnecessary spending. Take it from Mike Meyer, Managing Director of Critical Facilities Solutions, who says that “We use Fleet Geo data to help us with our costs.”
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How Fleet Geo Can Help Your Business Reduce Company Car Taxes
Businesses of all sizes are being squeezed from both ends by the pandemic and increasing taxes. To stay profitable, fleet managers must reduce petrol use, avoid Clean Air Zones, and save money in other areas to offset corporate tax increases. A digital fleet management system helps you accurately track your vehicle use, so you can stay on budget and avoid undue taxation.
Route tracking is essential in reducing the impact of increased fuel duty. On average, fleets reduce their mileage by 10% after introducing car trackers. The fleet management hardware not only tracks routes but it even records driver stops and idling time. The precise data gives you the details you need to optimise your routes, reducing the sting of increased corporation taxes.
While Clean Air Zones are a necessary fee, Vimcar’s vehicle tracking solutions helps you reduce these fees with proper route planning. Our route analytics allow you to plan the most efficient routes to work around these zones. Paired with Timefencing which signals improper vehicle use, you can easily utilise your fleet better, avoid resource-draining, and maintain a low company car tax.
Some fleet management software provider offer flexible pricing plans so you aren’t paying for services you don’t need. If you’ve been considering digitising your fleet, don’t wait for tax increases to catch up with you.