A wave of new laws and taxes have heaped a number of challenges on UK businesses and make it very difficult for decision makers to predict how to best manage a van fleet efficiently and cost-effectively.
Subsequently, UK companies that require vans for business use need to find solutions that enable them to minimise the new restrictions.
The big question for decision makers is whether to stay loyal to the company-owned fleet of vans or avoid the complexities and tax burdens by switching to a managed fleet.
This is what you need to know.
Vehicle Excise Duty
There is only an increase of 5 pounds on vans sub 1549cc and 10 pounds 1549cc +, the CO2 Emmissions scale does not apply to LCV’s as they are generally classed as job need
Tariffs on Diesel Vans
A government report indicates that diesel vehicles cause harmful emissions that significantly contribute to air pollution levels. In an attempt to reduce the UK’s carbon footprint, local councils are expected to introduce a diesel surcharge.
London will become an “ultra-low emission zone” in April 2019 which will expand to surrounding areas by 2021. Non-compliant vehicles will be ordered to pay £12.50 a day.
The Government has also expressed concerns that the condition of fleet vans – especially – are poor and unroadworthy.
To tackle the issue, MOT tests will use a ‘diagnostic tool’ to identify where repairs or replacements are required to improve road safety standards of fleet vehicles.
The FTA has reacted by promising to introduce benchmarks for the van community. It is expected that entire fleets will require servicing and will significantly increase the outgoings of companies with a fleet of vans.
Increased Vehicle Acquisition
Following the raft of new tax changes introduced in April 2018, manufacturers are being incentivised to build cleaner engines that fall below the emissions thresholds.
Whilst buying a new van for your business offers good value, the incremental increase on taxes will increase your overheads year-on-year. Ultimately, businesses will need to replace fleet vans more frequently. Going green may reduce running costs, but it increases the cost of owning a vehicle.
Increased Labour Costs
Once Britain leaves the EU, it is widely expected that fleet costs will rise significantly. A culmination of increased post-Brexit costs across the motor industry will increase the cost of running and maintaining a company van.
Trade tariffs are expected to be imposed in imports from mainland Europe to the UK once the 29 March 2019 deadline is passed. Given many high-tech motor parts are made overseas, the cost of buying and repairing fleet vans will increase.
Furthermore, the Prime Minister has already declared that low-paid workers from overseas will not be granted a work permit for the UK. Garages will be impacted with a higher wage bill which will inevitably increase service and maintenance costs.
The increased cost of owning a company van in the UK could leave businesses with a serious financial downturn. Van lease hire firms have a crucial role to play in helping UK companies cut costs by managing your fleet for you.