Fleet operators the length and breadth of the UK will be eager to hear what impact any announcements will have on their company.

Only 11 months ago, the budget confirmed the introduction of the scrappage scheme to boost the sale of new cars in the country. A resounding success in terms of retail sales for many car makers but offered little comfort to embattled fleet operators.

With fuel prices at near record-breaking levels, will the Chancellor offer any respite – or will the Government’s level of debt force more fuel duty hikes?

We asked prominent figures in the fleet industry what they most want to see in the budget – and what don’t they want to see…

• What would like to see included in the Budget?
• And what you don’t want to see included?

Martin Brown, managing director of Glasgow-based fleet solutions provider Fleet Alliance, says:

“I would like to see a clause included in the 2010 Budget announcing the removal of the 3% tax premium that drivers of diesel company cars have to pay, as I think it’s an unfair and iniquitous tax that has no justification. Diesel cars are NOT dirty or polluting – they are a carbon-efficient and viable form of modern transport, while the latest developments, including modern particulate traps, remove the perils of unseen particulates, and therefore there is no reason why diesel cars should carry this extra tax burden.”

“The thing I would most like to see NOT included in the Budget, although I fear from the Pre-Budget announcement in December that it is already too late, would be the re-introduction of fuel tax escalator that the Chancellor made mention of, as I believe that the UK already carries the highest burden of fuel tax in Western Europe. Fuel prices are likely to hit an all-time high this Spring at the same time as the economy is struggling to recover from recession, and this additional taxation on businesses is most unwelcome.”

Jason Francis, managing director of fleet software company Jaama would like to see included in the Budget:

• The Government should scrap plans to increase employer and employee National Insurance contributions from April 2011 by 1% – a planned 0.5% increase was made worse in last December’s Pre-Budget Report with the announcement of a further 0.5% rise.
• More low emission vehicles to be £0 rated for Vehicle Excise Duty. From April only cars with CO2 emissions of 100 g/km and below are nil-rated this should be extended upwards to include more models.
• There should also be greater benefit-in-kind tax incentives to encourage more company car drivers to choose low emission models.

What he wouldn’t like to see included in the Budget:

• The obvious one…. scrap the proposed 1p a litre above inflation rise in fuel duty scheduled for April 1. The Government fuel tax-take increased when VAT rose back to 17.5% on January 1 and pump prices are currently at almost record levels.

Julie Jenner, chairman of ACFO (Association of Car Fleet Operators) would like to see included in the Budget:

• The Chancellor should remove the penalising 3% benefit-in-kind tax supplement on diesel company cars
• The Chancellor has already announced the shape of company car benefit-in-kind tax to 2012/13 and he must announce rates for 2013/14
• A review of the Authorised Mileage Allowance Payments (AMAPs) thresholds for employees who drive their own cars on business – currently 40p a mile for the first 10,000 business miles and 25p a mile thereafter.
• A more serious commitment from the Government to electric vehicles to further encourage fleet take-up. Currently benefit-in-kind tax incentives have only been announced for five years from this April.

What she wouldn’t like to see included in the Budget:

• I hope the Chancellor decides against implementing the April 1 fuel duty increase of 1p above inflation. With fuel prices at or near a record high there is no justification for the tax rise, particularly with wholesale crude oil prices well below 2008 levels when record pump price levels were set.

Ross Jackson, Managing Director of fleet consultancy Fleet Operations would like to see included in the Budget:

• An announcement by the Chancellor that reverses the trend for fuel price rises. With a 1p a litre above inflation fuel duty rise due for introduction on April 1, the Chancellor continues to under estimate the impact on business of the cost of fuel and duty rises.
• The April introduction of a ‘showroom Vehicle Excise Duty tax’ is another stealth tax that businesses will end up paying for. It is therefore another measure that the Chancellor should abandon.
• The Government should aid long-term planning by finally announcing that it is not in favour of further new taxes such as congestion charging and workplace parking.

Fleet consultant Stewart Whyte, Managing Director, Fleet Audits, and ACFO, director would like to see included in the Budget:

• Something – anything – that looked like a coordinated transport strategy instead of a series of ‘little nibbles’ on individual topics.
• Assimilation of nearly all the incentives and concessions on “fuels for road use” into one programme that the electorate can understand and work with/plan for.
• A national strategy for ‘work-place parking’ or ‘congestion charging’ to accept Government responsibility for the big objectives that fleets can accept for their national operations. Specifically, permission and grants ONLY for schemes that use a nationally-available pass/tag/sticker/black box.
• It would be helpful if any NEW transport or ‘green’ vehicle-related concessions/discounts/programmes had a clear progression to expiry, rather than ‘100% for three to five years then 0%’ such as that announced in the last Pre-Budget Report on taxation relating to electric cars and vans and due to come into effect in April for five years. Why not a ramped programme that provided real incentives for the kick-off then reducing over time as market penetration is achieved? This is essentially how the company car benefit-in-kind tax system was designed and it has been pretty successful – moving from 165g/km in 2002/3 to 100g/km for 2012/13.
• A clear long-term fiscal strategy – ideally agreed across all the parties – on what the transport goal is – CO2 reduction? Other emissions? The strategy must be based on emissions ‘output’ and not particularly on specific technologies.
• A U-turn on the politics-of-envy on benefit-in-kind tax on fuel for private use: full review of getting fleet operators to monitor fuel use/spend instead of ‘getting rid of the problem’ by hiding it away.
• A root-and-branch review of ‘tax-free allowances for reimbursement of expenses for employees using their own vehicle for employers’ business’ – to provide a rational and fair-to-all-sides system to replace Authorised Mileage Allowance Payments (AMAPs).
• Funding (£10-£15 million) to get the DVLA’s online driver licence checking scheme up and running quickly, so employers can fulfil duty of care checks on at-work drivers.

What he wouldn’t like to see included in the Budget

• A Budget that assumed motorists and fleet operators were stupid and naïve, with a mish-mash of concessions and deferments which can’t possibly last beyond the general election.
• More specific-form of tax incentives for ‘plug-in hybrids’ or ‘wind-powered estate cars’ or the like – this form of tax simply generates short-term quick-buck niche markets
• Any less money going into road infrastructure: we need more roads and upgrades to what we already have. Contracts could be awarded to employ people rather than pay them unemployment benefit – and the nation would have something tangible at the end.

Andrew Leech, Business Manager at Mycompanyfleet, NorthgateArinso’s automotive software division:

“In this year’s Budget, I would like to see some recognition that there is no real viable alternative to fossil fuels and that the Government’s chosen route of backing electric vehicles is unworkable and misguided. Electric vehicles come with their own set of problems, not least that there is no second hand market for electric vehicles, but they are also too expensive and offer only limited ranges and uses. Hydrogen looks a much better long term bet as a viable alternative fuel, but until it becomes readily and widely available, the Government should consider interim measures such as re-introducing grants for conversion to lpg as lpg-powered vehicles have been shown to be economically and environmentally viable and I believe we have abandoned them prematurely.”

“I would not want to see the introduction of the fuel escalator as fuel prices in this country are already virtually the highest in Western Europe, primarily as a result of the extra tax burden that has been placed upon them. The only caveat I’d make to that is if there was greater hypothecation between the money collected through fuel taxes and the spend on the transport network and infrastructure, which is in serious danger of overload and collapse. You only have to look at the state of our roads after this particularly severe winter to see that they are crying out for additional investment and in many areas are severely congested.”

Tony Hulatt, Managing Director at CLM Fleet Management, comments:

“I would like to see  real, meaningful and lasting incentives for electric vehicles and a clear commitment from  the Government that they really are seen as an economically viable method of transport. New incentives announced in the Pre-Budget Report were that drivers of electric vehicles would pay a zero rate benefit in kind taxation, rather than the current 9%, for five years commencing from this April.   However, the problem with electric vehicles is that they have no second-hand value on disposal and therefore are considerably more expensive for companies to operate than other modes of transport. Ally to that poor national and regional re-charging facilities, limited performance and range and low driver appeal, and I feel that electric vehicles require far more support from Government at much higher levels than those currently  being suggested before companies can seriously consider them for normal fleet operations.”

“The thing I would most like to see NOT included in the Budget  is an increase in VAT to 20% as has been mooted in some quarters. As the Government is looking at such a huge borrowing deficit , it clearly has to do something to raise additional Government finance. But increasing VAT is not the way to go. To start with it would have a negative impact on companies struggling to come out of the other side of the recession as it will impact on the prices they charge and on goods they receive. More especially in the fleet market it would have an inflationary impact on many key components, including the list price of vehicles, lease rentals and other variables. But the biggest impact would probably be on the price of fuel which is already set to rise due to the escalator that the Chancellor announced at the PBR, and which would hit UK companies very hard.”

For coverage of the 2010 budget and how this will effect the fleet industry, check out FleetDirectory.co.uk on Wednesday 24th March.

A clear sign of recovering confidence in some parts of the UK fleet market is highlighted through an increase in demand for training courses for fleet managers and administrators, according to leading fleet consultancy Fleet Audits.

At the Best Western Frensham Pond Hotel, nr Farnham, Surrey there will be a ‘Basic Fleet Management’ level course on November 24 and 25 encompassing two full days tuition across all aspects of fleet operation. Stewart Whyte, Director of the Hampshire-based independent consultancy and the principal tutor on the courses, with almost 40 years experience of fleet management and the fleet marketplace said: “We have seen very little demand for any of our courses for most of this year.

“Recently, however, we have had a big increase in enquiries, making this ‘Basic Fleet Management’ course fully viable.”

“We have of course kept the content fully up to date, so it covers duty of care, driver taxation and grey fleet issues, as well as latest views on good/ best practice in fleet management.” said Whyte. “Our courses provide a solid bedrock of fleet techniques, controls and policies to help any fleet streamline their operation and cut tax, hassle and costs.

“During the two days, the modules will cover the fundamentals of fleet, with plenty of discussion about the specifics of how to control and cut costs. We especially point out the quick wins – of which there can be many – as well as the longer-term savings which can be achieved.”

Further places are still available on this course, or on later courses being planned for January/ February 2010. For further details contact info@fleet-audits.com or visit web site: www.fleet-audits.com

With speculation reaching fever pitch as to whether the embattled UK motor industry will receive a welcome shot in the arm, talk of green incentives and scrappage schemes have been rife in the media and the industry. But what of other areas where the Chancellor has direct control – Mr Darling has the power to reduce or raise the tax burden on companies and individuals; could there be a further announcement on the VAT reduction, much maligned since its introduction, or will Vehicle Excise Duty be tweaked?

In the Fleet industry with many still reeling from the increase in Fuel Duty on April 1st as well as coming to terms with changes to car allowances now linked to CO2 emissions, what do prominent figures in the industry most want to see in the budget – and what don’t they want to see?

We asked a selection of industry figures two questions:

• What is the one thing which you would like to see included in the Budget?
• And what is the one thing you don’t want to see included?

Robert Wentworth-James, head of sales and marketing at independently owned CLM Fleet Management. CLM was launched in 1981 and manages in excess of 20,000 vehicles on behalf of corporate clients nationally.

What is the one thing which you would like to see included in the Budget?

“I would like to see greater clarity in the government’s environmental approach in the Budget Speech, following the recent announcement regarding incentives for electric cars, as the first vehicles will not be available until 2010/2011 at the earliest.”

And what is the one thing you don’t want to see included?

“What we most definitely do not want to see is a continuation of the government’s fuel price accelerator, as fleets have faced a growing fuel cost burden in recent months and years. At a time of financial uncertainty as now, an additional cost burden is most unwelcome and could be the death knell for some companies, especially in haulage and logistics.”

Ross Clarkson, marketing director, Northgate Vehicle Hire. Northgate is Europe’s leading light commercial vehicle rental business with extensive operations in the UK, Republic of Ireland and Spain.

In the UK and Ireland, Northgate has a network of 21 local hire companies operating from more than 80 rental locations providing nationwide coverage from Aberdeen to Plymouth. The fleet of 65,000 vehicles, most of which are light commercial vehicles, is the largest rental fleet in the UK.

What is the one thing which you would like to see included in the Budget?

“We would like to see more help for businesses, particularly in restoring confidence. One area where the Chancellor can do this is in helping organisations obtain credit insurance.”

And what is the one thing you don’t want to see included?

“With the UK economy predicted to shrink by up to 3.7% over the coming months we don’t want the Chancellor to do anything that will remotely result in any further contraction and negatively impact on GDP. In the fleet arena we do not want to see any announcements with regards to fuel duty increases.”

Julie Jenner, chairman, ACFO (Association of Car Fleet Operators). ACFO Ltd is a non-profit making organisation, and is the largest UK body representing the interests of businesses which operate cars and vans as part of their normal commercial activities.  There are more than 900 members, collectively responsible for well over 700,000 vehicles in the UK fleet market.

What is the one thing which you would like to see included in the Budget?

“I would like to see an announcement that signals a genuine long-term investment commitment from the Government that encourages fleets to adopt alternatively fuelled vehicles. There should be no short-term incentive scheme, which would be seen as a repeat of PowerShift in the 1990s, which encouraged the fleet uptake of gas-powered vehicles and was then dropped when funding ran out causing significant marketplace concerns not least around residual values.”

And what is the one thing you don’t want to see included?

“Although the Government is keen to pursue a low-carbon agenda there must be no immediate short-term move to change the 10% benefit-in-kind company car tax rate, which is currently set at 120 g/km. The Government maybe keen to encourage the uptake of low emission models but a reduction of the 10% threshold to 110 g/km, for example, must only be made if business and drivers are given a ‘reasonable’ lead time to prepare for the change.”

Keith Vincent, marketing director at Active Risk Management (ARM). Active Risk Management (ARM) supplies fleet risk solutions to major fleet clients throughout the UK and offers a comprehensive approach to occupational road risk management.

What is the one thing which you would like to see included in the Budget?

“Hybrid cars, plug-in or otherwise, are the most likely stop gap before hydrogen fuel cell vehicles and, by offering front-end fleet subsidies, the Chancellor can make a bold, green statement of intent.”

And what is the one thing you don’t want to see included?

“As fleets already face an excessive fuel cost burden, we would not like to see further Excise Duty added to the pump price by the government.”

Martin Brown, managing director, Fleet Alliance. Fleet Alliance manages over 8,500 vehicles on behalf of corporate clients. The company has ambitious growth targets and will deliver over 4,500 vehicles this year, with plans to increase this to 8,000 by 2012.

What is the one thing which you would like to see included in the Budget?

“I would be delighted to see a sensible vehicle scrappage incentive introduced.  Whilst it is debatable as to whether or not it would directly stimulate the leasing sector, it would certainly bring some much needed confidence to the vehicle sector as a whole.”

And what is the one thing you don’t want to see included?

“The thing I would least like to see in the Budget is any further increase in VED tax, or indeed showroom tax, as this would act as a further dampener on demand, and what the economy most needs now is positive stimulus.”

Stewart Whyte, managing director, Fleet Audits. Fleet Audits is a leading specialist Consultancy, providing a wide range of strategic and policy support options for organisations which operate fleets.

What is the one thing which you would like to see included in the Budget?

“I would like the Chancellor to announce the permanent removal of the 3% diesel benefit-in-kind tax supplement.”

And what is the one thing you don’t want to see included?

“I don’t want to see another round of relatively short-term incentives, which deliver an apparent short-term benefit but potential long-term problems. These would include a narrow scrappage scheme along the lines outlined by the motor industry. The fleet/motor industry needs long-term strategic thinking from everyone and that includes Government.”

Andrew Hunter, commercial director at leading integrated telematics service provider, Eagle-i Telematics. Eagle-i Telematics is one of Europe’s leading Open Platform Telematics Service Providers, and offers a comprehensive capability portfolio including vehicle tracking, mobile asset management, satellite navigation, stolen vehicle recovery, telematics-enabled risk management (TERM) and lone-worker protection solutions.

What is the one thing which you would like to see included in the Budget?

“I would like to see incentives introduced for fleets that make meaningful and proactive investments in technology that helps reduce their carbon footprint. We need a clear signal as to the Government’s green intentions, so that fleets can make proper, informed and long term investment decisions.“

And what is the one thing you don’t want to see included?

“What we don’t want to see are any measures that increase the operating cost or legislative burdens that fleet operators already face.”

Andrew Leech, business manager at fleet software solutions specialist Mycompanyfleet, the newly launched fleet and automotive division of HR solutions provider, NorthgateArinso.

What is the one thing which you would like to see included in the Budget?

“I would like to see the introduction of concessions on benefit in kind tax if drivers car share with colleagues on way to the office. This would help reduce congestion and pollution, especially in urban areas, and is definitely worth investigating.”

And what is the one thing you don’t want to see included?

“What we don’t need are any gimmicks relating to electric vehicles. These vehicles still rely ultimately on fossil fuels for their production and power, so until we address that core problem, the latest incentives can be little more than a gimmick.”

David Hosking, managing director at Tusker. Tusker is one of the fastest organically growing independent contract hire and fleet management service providers in the UK. Their award winning service is delivered through one of the most advanced live quotation and fleet management system in the UK and runs securely over the internet, helping companies reduce the time and hassle associated with running a fleet of company cars.

What is the one thing which you would like to see included in the Budget?

“We would like to see the introduction of a new BIK banding of 5% for vehicles of sub 110g/km in carbon emissions, to further encourage the take up of green fleet vehicles.”

And what is the one thing you don’t want to see included?

“I am hoping not to see a return to VAT levels above 15% later this year. We, along with many other businesses, worked hard to adopt the change from 17.5% to 15%, and the last thing we want is a return to even higher rates, please Mr Darling!”

The Budget will be delivered to the House of Commons on Wednesday 22nd April.

Fleet operators need to look beyond the current headlines – depressing though these are – to maximise their chances of long-term survival in these challenging times.

Pro-active fleet management to contain or reduce costs is essential amid the economic turmoil, according to experienced fleet consultant Stewart Whyte, managing director of Hampshire-based independent consultancy Fleet Audits Ltd.

Key action areas, says Mr Whyte are:

• Fuel budget management
• Reviewing allocation policies
• Examining all aspects of the fleet funding arrangements, ahead of the April 2009 changes in corporation tax rules

The consultancy has already revised its range of services to meet rising demand for independent expert advice amid the economic turmoil.

While continuing to offer full strategic and policy-level audits, Fleet Audits now offers a ‘Fleet Health Check’ and has also provided ‘Fleet Master-classes’ to groups of senior management in several existing clients, providing a full perspective on current market conditions, recent and forthcoming tax changes, and operating options.

Mr Whyte said: “Of course these are difficult times for many fleets, but it is not the first time that both demand and supply sides of the fleet industry have had to face up to recession. Despite the gloomy headlines, the fact is that most businesses will survive the current downturn, as we saw in the recessions of 1973/5, 1979/81, 1990/92 and the ‘dot.com’ boom/bust. Most companies will continue to trade, but the current climate provides the opportunity for most fleet operations to become ‘leaner and cleaner’ and thus save money.

“The important thing is that most businesses can significantly contain or reduce fleet costs by quite simple actions – and that must increase the chances of the core business surviving intact.”

The large increases in petrol and diesel pump prices across the earlier part of the year, the 2008 and 2009 increases in Vehicle Excise Duty for many fleet models, the sharp falls in residual values of most classes, hardened insurance and claims costs – all put additional pressure on employers, on top of the earlier factors of Duty of Care/ Corporate Manslaughter and Corporate Homicide Act and many other issues.

But these circumstances give businesses the best opportunity for many years to rein in fleet costs and revitalise their policies to meet current and future demands, according to Mr Whyte.

“While there are all these significant pressures, many companies have the foresight to realise that the current conditions provide the basis for constructive changes to fleet policies and arrangements,” he said.

The major concern should be winning back control of the fuel budget through better recording and reporting of fuel use.

Mr Whyte said: “This is the ideal time to review the fleet allocation policy to identify more appropriate cars and vans, to reduce fleet fuel consumption and CO2 emissions – which must continue to be a business priority. Cleaner, greener models will reduce fuel costs and whole life costs as against many ‘user-chooser’ favourites, through lower road tax levels and much better residual values. This will be true for both leased and owned fleets.”

One major concern for the whole industry is that far too few fleet operators have yet latched on to the changes – effective April 2009 – in the corporation tax regime. This is likely to increase most pre-tax costs – but paradoxically may reduce the after-tax costs of some of the expensive and larger, thirstier models.

“The pattern of ‘winners and losers’ is not obvious” remarked Mr Whyte. “This is a situation where every single model has to be examined for the impact of the changes. Employers who do not review their policies could well find the depreciation and funding elements of their fleet costs increase by up to 15% as a direct result of these changes, whether they leased or buy. These changes will also impact on many public sector fleets.”

However, Mr Whyte warned that the policy of simply offering cash options to employees on the basis of allowing them to continue to run their own cars was almost certainly flawed.

The clear underlying message is that the cost of running a larger/ high-emitting car is going to increase, irrespective of who owns it. Increasing Vehicle Excise Duty rates will apply to the car whether it’s a company car or employee-owned. Similarly, low residual values will apply to big, thirsty models because used-car buyers will be unable to accept the high road tax or fuel costs.

“It is pretty clear that employees who continue to demand larger cars will cost employers more and more either directly as company cars or funded through some form of cash allowance or alternative scheme,” warned Mr Whyte. “No-one can make these market-place costs disappear – although well-run fleet operations and leasing companies probably have a better chance of controlling them than the individual employee.

“This is actually a good time for most organisations to look closely at their fleet strategy. The current employment market makes this easier than in boom times – and there are some very good deals to be done in the generally weak market. All the options are open and need to be explored constructively, with many more businesses finding that if done properly and positively, extending vehicle life-cycles can be part of a winning strategy.

“The most important thing is to be pro-active. Businesses that fail to act on managing fuel costs, or which continue to ‘invest’ in big, thirsty models will be made to realise that this is a high-risk/ high-cost strategy in today’s climate – and in tomorrow’s as well.”

The changes, which are based around a car’s CO2 emissions, will hit many companies that buy vehicles outright and all fleets that lease their company cars.

With effect from April 1, 2009 for corporation tax purposes (April 6, 2009 for income tax) expenditure on cars with CO2 emissions above 160 g/km will attract only a 10% writing down allowance (WDA) and expenditure on cars with CO2 emissions of 160 g/km or below will attract the normal 20% WDA common to all assets.

In addition to this, the 100% first year allowance for the cleanest cars will be extended from March 31, 2008 to March 31, 2013 and the qualifying CO2 emissions threshold will be reduced to 110 g/km from 120 g/km.

However, the main fleet focus is on the 160 g/km benchmark. It is estimated that an average upper medium sector car with a CO2 emissions figure of 160 g/km could be up to £30 a month cheaper to operate than a similar car with a CO2 emissions figure of 161 g/km.

But, the major problem facing fleet decision-makers – and also company car drivers – is that they will select and order their new company cars based on published CO2 data, which does not take account, for example, of optional accessories fitted to models.

A car’s official CO2 emissions figure for tax purposes is only confirmed once the Driver and Vehicle Licensing Agency issues the V5 registration document.

Stewart Whyte, managing director of Hampshire-based Fleet Audits, who identified the potential problem, said: “This could be a nightmare for fleets and leasing companies. A business and employee may quite innocently select a car with an emissions figure of, for example, 156 g/km only to find out it is actually a 161 g/km model when they receive the V5 document – up to three weeks after the car goes on the road.

“This will result in fleets and leasing companies having to look afresh at the entire whole-life cost calculation because the tax implications of the capital allowance changes will be significant.

“Outright purchase fleets will have to recalculate their writing down allowances, while leasing companies will look to recalculate monthly rentals.”

To overcome the problem, Mr Whyte said: “Obviously the first advice must be to try to use only models with CO2 emissions well below the 160 g/km level. That makes good commercial as well as taxation sense. But there are many fleet situations where bigger vehicles are needed for load capacity etc. – some larger estates and MPVs for example which are perfectly legitimate as company cars in many cases.

“The situation for leasing companies is much worse. If they build a quotation for a car with a published CO2 figure of say 157 g/km, they cannot simply assume that the V5 will never show a level higher than 160 g/km – and that completely changes the tax calculations and after-tax costs for both the leasing company and the client.

“To protect themselves, many lessors may find it simpler and safer to quote for any cars with a quoted figure of 155 g/km or more on the assumption that the figure is ‘above 161 g/km’, and base all whole-life cost and tax calculations around that figure. If the V5 then comes through at 160 g/km or below, the fleet operator should then be in for a windfall – if they follow through with a detailed analysis of the quote and the delivered car.

“The fact that the tax rates change at the cliff-edge of ‘160 good/ 161 bad’ means that a small mistake for cars in the rage 155-160 g/km could be very expensive for the lessors, so they have no real alternative but to play it cautiously. But this will increase the after-tax costs to the lessee, because the basic rental will increase and the flat-rate rental restriction will both cost clients.”

One client group likely to suffer from the changed system is public sector clients which need to lease cars over 160 g/km, for specific job-need functions. Although they have no tax allowances to worry about for their own business, the lease rental on such cars will increase sharply as against the current levels because of the reduced tax allowances for lessors – even before taking into account the higher VED and lower residuals for larger, higher-emitting models. So many public sector organisations will be just as hard-pressed to meet budgets as tax-paying private sector businesses, warned Mr Whyte.

The DVLA has advised Fleet Audits that there have been few challenges to an emissions figure shown on a car’s V5. However, the new capital allowance rules may herald additional inquiries by fleet operators and lessors into individual cases, for these corporation tax effects – and therefore possibly also on company car drivers’ benefit-in-kind tax payments.

Mr Whyte said: “This is not scaremongering. This could happen and fleet decision-makers and company car drivers must be aware of the possibilities. Fleets need to start making some big decisions about the allocation policy and funding methods before there is a chance of some big bills arriving.”