In 2013, the Association of British Insurers instructed the market that the current system it uses for assessing vans wasn’t fit for purpose. Two decades without an upgrade, they had a point. In the last five years alone, new vans rolling off the production are a world apart from their predecessors.

The new system, against which all new vans will be rated, is here and will be with us next year. It moves away from the current weight-centric system and focuses on different metrics. Where before there were 20 bands covering van insurance there’ll now be 30. The additional criteria focus heavily on design, including repair time.

The latter is important and it seems strange that no measure for time spent in the garage was included in the current system. If a van only has to spend 24 hours in repair instead of a week, it would reduce the volume of cover vehicles an insurer has to have on standby. The actual cost of replacement units aside, labour cost of repairs should also come tumbling down.

The current problem with weight-centric insurance bands sees certain weights of light commercial vehicles creating a bottleneck. That will change rather than be replaced.

Shape is also a metric ignored now that has a bearing on van insurance cover costs. It will be addressed in the forthcoming update to the system with a new ‘geometric’ test. If the wheelbase, height, width and bumper-to-bumper measurement fit within a certain scale, geometry will also affect the cost of your cover. To reconcile these scales, the RCAR bumper test features heavily in the weighting criteria.

Using the new system to help choose your type of LCV

There are several points of note in the new system that may influence fleet managers and business owners in their buying decisions. Thatcham Research, driving the change to the system, have collated a list 19 of the most common replacement parts vans need when going in for repair.

It’s rare that a component that does a job on a Merc, say, is the same its counterpart on a Peugeot. True, having working in the automotive supply chain, I know that there are common parts across the commercial vehicle range. But they tend to be manufacturer-specific and not universal parts that could go onto any vehicle.

Why this is so beggars belief. The BS range (and subsequent ISO standard) was created for a reason. Why that can’t apply to fixings that hold an engine together Lord only knows. But no. Vehicle manufacturers do like to design their own parts, no matter how difficult they are to produce and actually get to line-side. But I digress…

…for the purpose of the new van insurance rating system, if one of the 19 common elements Thatcham have identified is more expensive on one make of vehicle than another, it will affect the insurance premium.

Another factor van drivers and fleet managers may want to keep their eye on is which of the manufacturers out there are looking to submit their existing vehicles to the new tests. Whilst the new system will apply to all news vans from next year, if an existing model meets the new safety and geometric criteria, it too could qualify for cheaper van insurance.

We live in an age of technology. Big data and micro management are key phrases in all industry sectors leveraging digital information, both online and inhouse. Whilst telematics are making extracting, reporting and using this data accessible for fleet management, few businesses are ringing the changes to make the most of its insight.

Coventry was the venue for last week’s RHA Compliance Conference. In excess of 400 key stakeholders gathered for the event, marketed as relevant to everyone in the road transport industry. The list of speakers and their backgrounds certainly lived up to the billing.

Speaking of technology…

Of course, you had Microlise. It was they who carried out the survey at the conference to highlight how little fleet managers and business leaders were leveraging technology. As the thirty-year old Nottingham company are one of the lenders of reducing costs through technology, it was perhaps fitting (and a little more than coincidental) that they were on hand to conduct the poll.

But the guest speakers came from a variety of backgrounds. You had several RHA representatives drilling home the need for compliance. They covered everything from employment and regulatory statute to drug-taking drivers and compliance retention across the fleet. Other speakers of note included:

• the DVSA, outlining the future for enforcement;
• the One Show’s Dr Sarah Jarvis was on hand to talk about managing driver health;
• Jeremy Moore OBE, tackling retraining for drivers who’d offended;
• the UK Border Force, who took on risk-management;
• and the keynote, delivered by Traffic Commissioner, Richard Turfitt.

Whilst all fleet managers are, by now, conversant with the topics covered during the conference, they are far from comfortable with telematics.

Shock responses from transport decision makers

On their website, you can find a full summary of the poll’s results. But here’s a snapshot of the most stand-out answers. Given the experience of the attendees, they’re quite shocking:

Does your business use tacho data in areas other than driver compliance?

• Yes: 27%;
• No: 73%

Are vehicle checks conducted on paper or with a digital device?

• Digital (Mobile/Handheld): 12%;
• Paper: 88%

And what about telematic-driven driver incentive schemes?

• no telematics whatsoever: 25%;
• no incentive scheme in place: 61%;
• no telematics and no incentive scheme: 14%.

The weather forecast

Compliance has always been a serious issue with road safety authorities. Their concern has always been having the manpower to conduct thorough spot-checks of the many, many industries who employ fleets.

But make no mistake, those days of having to be on site to conduct such checks are nearing the end. The RHA, DVSA and many others responsible for the safety of vehicles on our roads are leveraging big data. The signs from the conference are that the responsibility to report operational functions digitally is filtering down to fleet managers.

And what many businesses are missing is that telematics are not only about vehicle safety. They present an opportunity, too.

As the Microlise report points out, running a fleet effectively can be costly. It can be even more expensive if you don’t extract relevant information or, more worryingly, understand what is relevant.

The costs of fuel, depreciation, compliance and fleet insurance can all sky-rocket if you don’t keep them under control.

With telematics, deployment of a company’s fleet need no longer be the sole responsibility of the ‘transport department’.

Plug this information into the company’s mainframe and every stakeholder in the business has visibility of the best use of their employer’s fleet. But you must be able to understand it first.

From sales making delivery promises, accounts booking the costs and warehouse staff prioritising picking and packing, technology can help streamline a whole business.

Are you using this technology just as a GPS system to see where your drivers have been? If so, it’s time to step out of the dark ages and embrace the digital dawn.

By now, we’re used to the systematic, hydromatic, automatic machinations of our vans’ mechanics. But it’s time to de-grease those hands and let telematics take centre stage.

If you’re planning on upgrading your fleet after the 31st March 2017, beware. The road fund license is back, and how. Chancellor Osborne was swift on the detail when he announced the return of the tax, but its implications are far-reaching.

The reform to Vehicle Excise Duty will take effect on cars registered after 1st April 2017, with all but all-electric vehicles exempt. For all other cars, expect to pay £140/year for the privilege of driving new wheels. If the list price of your chosen vehicle exceeds £40,000, you’ll not only pay the £140 smackers, but an (un)pleasant £310 supplement, to boot.

The amount you’ll pay is based on your emission levels; on the face of it, that sounds like a positive move towards promoting green energy. But here’s the rub.

Current vehicle excise duty only comes into effect if your engine emits 100gm of Carbon Monoxide per every kilometer you drive. This is Band A under current regulation and many new cars, hybrids especially, fall beneath this limit.

The new ruling sees the threshold of exemption plummet to only 1kg of CO₂ per km. This means only all-electric vehicles will escape VED.

The full extent of the tax, such as it is, you can find on the government’s dedicated Vehicle Excise Duty web page.

What’s brought about the return of the tax?

Less and less cars coming off the production line emit high volumes of CO₂. As a consequence, fewer vehicles qualify for Vehicle Excise Duty. As it stands, many motorists driving new vehicles don’t pay any duty at all.

Then there’s the price of petrol at the pump. It’s down, forecast to come down further and the government froze rises in fuel duty to aid economic recovery. The Chancellor, if he stays on track, has promised to deliver £20bn in savings during this Conservative reign.

The dual effect of less Treasury income from both VED and at the pump has forced the Chancellor’s hand.

Many people across all industry sectors are questioning the Chancellor’s maths already. To prevent further potential tax income slip through the government’s fingers, the Chancellor has pulled an ace – the Road Fund License – from up his sleeve.

Fleet managers face difficult choices

The move is going to be difficult for fleet managers to digest if they want to help the UK reach the EU emission limit by 2020, as we must.

Vehicle manufacturers are doing their bit. But with electric fuel still not recognised in the advisory fuel rate and now the exclusion of hybrid motors from VED exemption, it’s difficult to see budget-conscious fleet managers accommodating green initiatives.

HMRC has issued the new advisory fuel rates, the advised recompense employers should award employees claiming company car mileage. The new rates will usurp the existing ones on the first of September, with the grace period of overlap of one month from June’s figures granted as standard.

What will disappoint motorists, as well as green bodies and those driving the e-volution of emission-free transport, is that there’s still no acknowledgement of electricity as a fuel by the Treasury.

Petrol, Diesel and LPG, yes. Some of those rates stay the same. Others have decreased, possibly due to the decrease in the price of barrels of crude oil. The forecast reduction of the price at the pumps also could be triggered by whispers of a ‘glut’ of petrol reserves building up around the world.

Here’s the complete table, showing both the rates that take effect from September and the legacy prices from June:

Watt, no electric?

The cynical amongst us, especially those with businesses, will point to two glaring issues (before we even get onto e-vehicles being absent):

1. all of the reimbursement levels for diesel have reduced for the coming quarter;
2. the smaller capacity vehicles have also see their rate of compensation drop, but the gas-guzzlers have not.

Given that the government has committed to both businesses and the environment, it seems the tax man isn’t even in the same book, let alone on the same page. For company car/van drivers, the incentives are there to keep the 2.0-litre plus engines. In contrast, employees who go for economic vehicles less than 1400cc will be able to claim less back on their mileage.

Back in June, Fleet News published the thoughts of TMC‘s commercial director on the absence of HMRC considering electric fuel for the AFR tariff.

The article goes into the maths of how, using the Energy Savings’ Trust figures, Fleet worked out a token AFR rate for electric vans and cars. The TL;DR version is that employers should reimburse employees who drive electric vehicles £0.03/mile, or 0.294p if you want to be exact. 😉

Let’s hope the government applies a little pressure on the Tax Man to incorporate green fuels into its next AFR directive. As it it, the fact that he ignores electric fuel is, well, quite shocking!

As small business owners – or even employees – we all want to save a few bob on our tax bill. With the rise of the company car, so accompanied the creation of (and subsequent rises in) tax for the use thereof. What was once a blessing, a benefit of kind, has since become a benefit in kind. As such, the tax man takes his cut of that perceived benefit.

What doesn’t help proving or disproving an individual’s liability is the letter of the law. When HMRC class even the commute to work in a fleet vehicle as a benefit, there’s little defence an employee can give for not paying their dues.

For van drivers, the legislation is different. Using their van to get to site the tax man classes differently from an employee making their way to work. The key difference is that the van is classed as a tool of the trade, not a benefit.

For a more in depth view of these differences, this concise overview from TomTom covers all the main points.

What’s the best way of avoiding Benefit in Kind for company cars?

The waters become muddier for employees who work for car dealerships. The employer – the dealer – often grants the employee the use of a car from the pool.

Like any business that has a pool of cars, any employee can use any vehicle. They can then use that vehicle for business or personal use.

But, as it’s not a company car in the technical sense, where does the tax liability kick in? How does the employer keep track of who’s using which vehicle for what purpose?

With a vast fleet at a manager’s disposal, the admin alone can become a full time job. Factor in the cost of any fuel for which the employee does not reimburse their employer and the cost can also become inhibitive.

DMCL’s BIK module tool: app-y days are here again

A handy tool from Dealer Car Manager can help eliminate any doubt as to who’s doing what and when in any company vehicle. It won’t necessarily eliminate tax liability, but it will help determine accurate usage.

They say that necessity is the mother of invention. And sometimes, the simplest solutions are the best. DCML’s BIK module tool is the product of that need and is simplicity itself.

Designed for car dealership employees using demonstrator models, the tool uses GPS technology. Each employee has their own id and, as they set off on a journey, they can choose to record that journey as business or personal use.

Number-crunching the data without the headache

And this is the ingenious bit – the legs paddling under the water that makes the whole thing look simple and graceful on top. In the background:

• the fleet manager can adjust the cost of the forecourt price the business pays for fuel;
• the tool calculates mileage for each employee via telematics – onboard software – or from a smartphone app;
• the software recognises the vehicle type and adjusts an individual’s liability in accordance with government vehicle bands;
• works out the Benefit in Kind liability for an individual and stores it in a verifiable format for transmission to HMRC at any given time.

But the key thing here from an employee’s perspective is not how smart or simple the app is. It’s if they pay back their employer for every mile they travel for personal use, they’re exempt from BiK tax liability. Bonus!

Of course, it’s down to the individual to repay their full mileage. Some may see it more beneficial to pay the tax on the benefit. But if you’re looking for a 100% legitimate way of avoiding Vehicle BiK, DCML’s Compliance Manager looks like it’s got mileage.

Two stories of note hit the fleet vehicle headlines last week. For managers looking for low emissions and optimum choice, few places on the globe rival the UK right now. But what do they mean for the humble employee? What’s good for the goose may not be so appealing to the gander:

• SMMT reports UK car manufacturing figures hit 7-year high;
• Fleetdrive launches Salary-Sacrifice scheme for ultra-low emission vehicles;

SMMT Report: June 2015 UK Car Manufacturing Highest Since 2008

SMMT released June’s UK car manufacturing figures last week. Reverse trends, new highs and year-on-year increases all bode well for the economy.

The first point of note is the year-on-year increase. Overall, British industry produced 5.4% more cars this June than last. The government will be impressed with this upturn in output, as increased productivity is one of the cornerstones of their plans to take the UK back to the top of global efficiency.

The half-yearly figure, however, is the one that’s making the headline. The six months to the end of June 2015 saw output rise by 0.3% based on the same period last year. This cumulative figure has seen more cars manufactured in the first half of 2015 than in any similar period since 2008.

Export (up) and Domestic Market (down) Fortunes Flip

What will please economists more than those figures though is the reverse in fortunes for the UK Export market.

In total, 143,759 cars rolled off British production lines in June. In recent months, we’ve seen demand for those vehicles grow at home and shrink abroad. Not so last month.

The domestic market contracted, with 28,351 cars representing 7.1% less demand than June 2014. In contrast, the export market more than picked up that slack. The 115,408 cars produced bound for overseas is 9.0% up on June 2014.

That’s a big drop for at-home sales. It may mean employees turning to their bosses for transport. Which is precisely where this next headline kicks in. Or not.

Fleetdrive in Drive Towards Ultra-Low Emissions

How committed are you to the environment? Well, a new initiative from Fleetdrive is sure to test your green mettle.

In return for sacrificing a part of your salary, you could lease a green, electric car from your employer.

On the face of it, it doesn’t sound such a tempting offer. Company cars may once have been a boon. But in more recent years, they’ve become more of a burden.

The underlying philosophy of Fleetdrive’s new scheme is that ultra-low emission vehicles are cheaper to run. Used on a permanent basis, the reduced fuel cost could be financially beneficial to company car owners.

Barking up the wrong tree?

Fleetdrive has drafted all of the provisional legal documents to make this work from a contractual perspective. That means there’s no comeback on the employer from taking the deduction.

The problem is going to be convincing employees it’s a good move for them. The deal is only a lease, so you’re giving up part of your salary for something you’ll never own. Plus, and a concern for the family man, the car has to be returned in the condition it was leased to them.

We all want to do our bit for the environment. But whilst this scheme may be good for our planet, many employees will think that a little green man from another one devised this initiative.

In London, 8,000 people die each year from smoking. That’s according to the report from the London Health Commission late last year. The same report tells us that its author, Professor the Lord Darzi of Denham, was “shocked” to find that 4,200 Londoners die each year from air pollution in the capital.

Imagine Lord Darzi’s state of mind this week as King’s College published findings suggesting that more than double that amount succumb to the city’s toxic air? Moreover, the non-governmental organisation ClientEarth suggests that the new 9,400 annual total, based on deaths studied as far back as 2010, are “only the tip of the iceberg”.

By coincidence, it was in 2010 that Transport for London began to deprecate the alternative fuel discount. And perhaps by design, TfL is one of the addressees of the Health Commission’s report. But is the government and/or mayoral office willing to listen?

Choosing lower emissions may not be in the UK government’s hands

Coinciding with this week’s King’s College publication is the MEP’s environmental discussion in Brussels. Initial proposals left those in greener camps disappointed. But the higher air pollutant targets the committee has now set for Europe, which it hopes to finalise as a bill sooner rather than later, have pleased the pro-environmental set.

Labour, Green Party and Lib Dem MEPs have all welcomed the heightened ambition of the EU. The Conservatives have bucked their rivals’ trend, labelling the new measures both unrealistic and unreasonable.

True, much of the Tories’ chagrin is a result of the inclusion of methane and ammonia in the new targets. Using penalisation of the agricultural sector as their reasoning, Julie Girling (Conservative MEP) believes the new measures the EU hopes to introduce will delay the signing off of the bill, as well as making it untenable.

Is the government protecting investment from the oil industry?

Going back to the London Health Commission report, Lord Darzi appeals to the government and London mayoral office to introduce an Ultra-low emission zone in the capital.

Thinking back to last week’s budget, new taxation makes owning a fleet of electric cars and vans a less appealing proposition for fleet managers over the life of the fleet. This suggests that Lord Darzi’s pleas have fell on deaf ears.

However, Autogas have also joined the chorus. Their LPG fuel powers 150,000 cars and commercial vehicles in the UK to date. Compared to the 10 million drivers who use LPG on the continent, we still have some catching up to do.

With the EU emission bill imminent, it’s a race we have to win. And there can be no moral argument against the cuts to dangerous toxins in our fuel. There are 1,400 stations offering Liquefied Petroleum Gas across the UK. The fuel’s emission of NO₂ is 80% lower than diesel and 98% lower in PM2.5, both lethal toxins in high doses.

It’s not just the environment and lives we could save by going green

If the government isn’t making the switch to green energy easy for fleet managers, then perhaps the price of LPG will. According to Autogas, LPG is 40% less at the pumps than diesel.

Irrespective of the Chancellor lessening the cost benefits of going green – not that the oil companies have any influence in government, of course 😉 – a 40% saving on a fleet’s annual fuel bill may well tempt businesses to convert.

Autogas is calling for the government to reinstate the conversion to LPG it once offered. In the meantime, it’s integrating the service into the core operations of many of its service stations.

The company – a joint venture between Calor Gas and Shell Oil – also wants the congestion charge exemption reinstated in the capital to encourage drivers to lower their emissions.

The government may not agree that going green is high on its priority list, either at home or in Europe. 9,400 lives lost to air pollution in 2010 alone says they’re wrong. They were quick enough to ban smoking in public places. With air pollution a greater potential threat, how can they now refuse to ban high-emission fuels?