Experts in Vehicle Leasing

Budget is an opportunity for fleets to widen scope

Budget is an opportunity for fleets to widen scope

As a champion of alternative mobility solutions, ALD is pleased to see that this Budget has opened the door for fleets to look beyond the traditional company car.

There was the welcome news that employees will not pay BIK on the electricity provided to charge their electric vehicles at work. The government also announced plans to prioritise Alternatively Fuelled Vehicles (AFVs) with a pledge to plough £400m of investment into the UK’s electric vehicle charging infrastructure. This is a step in the right direction to encourage the widespread uptake of AFVs in opening up this type of vehicle to many more fleets.

In a recent survey*, ALD found that 42% of drivers are put off adopting AFVs because of the lack of a suitable infrastructure for EV charging or the availability of alternative fuels. In the same survey, ALD found that 32% of company car drivers would consider an AFV for their next choice of vehicle but would need more information about them in order to make the decision. Clearly the investment in the charging network is a high priority, but it should include investment in education around AFVs and their benefits in order to really boost their numbers.

Matt Dale, Consultancy Services Manager for ALD Automotive and winner of the Energy Saving Trust Unsung Fleet Hero Award, comments: “The measures announced in the Budget will help to widen the pool of mobility options available to fleets, allowing them to create a mix of smart travel solutions for their employees that go beyond the traditional company car. The £100 million to guarantee the continuation of the Plug-In car grant to 2020 further supports drivers planning to have a qualifying BEV or PHEV in the future. Our hope is that these measures will also encourage businesses to invest in work based charging, and attract more drivers into cleaner, more sustainable vehicles.”

The decision to increase the diesel company car BIK supplement from 3% to 4% from 6th April, 2018 for all diesel cars, apart from those that meet the Real Driving Emissions 2 (RDE2)** standards, will add cost for thousands of drivers who may still have 2 or 3 years to go before their car is replaced. However, the Chancellor’s announcement that fuel duty will be frozen for an eighth consecutive year indicates that the government accepts that diesel continues to play a vital role in the motor industry and this move alone will result in huge savings for drivers and fleet operators alike.

Whilst it was confirmed that BIK taxation will continue to be based on the carbon dioxide emission figures that are compatible with the current New European Driving Cycle (NEDC) derived official CO2 figures until 2020, rather than the new WLTP (Worldwide harmonised Light vehicles Test Procedure), the fleet industry was disappointed by the lack of information on what will happen to BIK rates after 2020.

Dale explains: “With a typical replacement cycle of 3 or 4 years, fleets, company car drivers and businesses will still be looking for a clearer understanding of what will happen to BIK rates after April 2020. The last thing they’ll be wanting to face is any potential spike in their tax bills when the new process comes into effect in the 3rd and 4th year of their car.”

*The Pulse Survey 2016-17 was conducted on over 500 drivers from different fleet sizes and across the UK, between April 2016 and June 2017

RDE2** - Real Driving Emissions Step 2 is due to apply from January 2020 for all new car models and all cars from 2021


Notes to editors
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