Organising your business to stay in business - whether that's CBLIS loans or furloughing staff - it's certainly been a very demanding time for business owners.
But as some of that complexity clears, it's time to consider a variety of issues affecting your fleet. Here at Concept Vehicle Leasing we've put together some information that will help your business fleet run smoothly.
For drivers that you have furloughed you can help them avoid paying benefit in kind company car tax. That's because HMRC says their company car can be handed back. Virtually.
Nigel Morris, Employment Tax Director at MHA MacIntyre Hudson, offers this advice:
"HMRC's decision that company cars won't be seen as available for benefit in kind tax purposes where they are 'virtually' handed back, by returning keys and fobs, was a positive move."
However, Morris does add this warning:
"Perhaps it does not go far enough in dealing with the associated issues of having a car that can't be accessed, moved in an emergency situation or maintained - which the industry and HMRC may need to consider. HMRC could further support businesses by amending the 'unavailability rule' relating to consecutive days of unavailability to 21 days, from the current 10 days. Otherwise even handing back may not save benefit in kind tax for drivers, or National Insurance Contributions for Employers if the car is reinstated within 30 days."
As well as these issues to consider, you should be careful about how key hand back is handled. Caroline Sandall from the Association of Fleet Professionals, warns:
"The main immediate problem that needs to be avoided is employees simply pushing their keys back through the letterboxes of unattended offices, something of which we have heard several reports. For your employer and HMRC, this doesn't create an audit trail showing when the key was returned or to whom, which is something that may need to be ultimately established to the satisfaction of either or both.
"It also creates a possible fleet management problem for the future. If you run a single or limited badge fleet, you could find yourself with a pile of identical keys and no means of working out how to link them to a particular vehicle. Plus, there is quite a high probability that keys will be lost and replacing them is always expensive."
All appropriate government advice about social distancing should also be observed during virtual return of company cars.
All vehicle deliveries and collections have been suspended. That means that if you were expecting a new lease car to be delivered - especially if it was pre-April 01 (for VED) or pre-Apr 06 (for benefit in kind) - your driver may pay more in benefit in kind tax and the lease rental will also increase. This is due to the introduction of the new WLTP measurement of CO2 emissions, which are generally up to 20% more than previously stated figures.
The British Vehicle Rental & Leasing Association (BVRLA) has spoken to the Treasury about the issue but said the Treasury's response was a no. The BVRLA said:
"Given the timescales involved, the fact that Parliament is now in recess and the allocation of Treasury staff to other Covid-19 related priorities, there is no way of delaying the advent of WLTP-based CO2 tax in April."
If your vehicle is due for collection, your vehicle funder is allowing extensions on the contract. Don't forget to ensure that the car continues to be insured.
Alternatively, you can finish the contract as intended but not use the vehicle. In both cases you will need to contact your vehicle funder for the appropriate actions.
Keep it charged
If you are not using your car at all, then its battery will slowly deteriorate. In order to keep the battery in good condition you should give it a trickle charge to keep it topped up if possible. This is best to do with the battery in the car, because various functions in modern cars require constant current. Ensure you understand how to do this before you start. YouTube is full of videos with examples.
Diesels and DPFs
Modern diesels are fitted with a DPF - a diesel particulate filter. These do not take kindly to short journeys because they soon start to clog up. Should this happen, the car will go into limp home mode and will not be usable. Cleaning or replacement DPFs are expensive. The answer is to take the car for a long (at least 45 minute) run every two weeks or so depending on how many short journeys have been undertaken. Always respect government advice on coronavirus, though.
Charging and EVs
Fully electric cars (EVs) do not like to have their batteries maintained at 100% all the time. This will lead to performance degradation. It is best to keep the battery at
between 50-80% charge.
You can keep your EV plugged into the charger if it has the ability to maintain a certain state of charge (between 50-80%).
If not, you may have to do a bit of math's to deliver the required state of charge you want. For more on this head to electrochemist Dr Euan McTurk, and his excellent but short video on YouTube called Keeping your EV healthy during the coronavirus lockdown. It's on Plug Life television.
Key workers, delivery drivers and so on still need to keep mobile. While the MOT requirement has been given a six-month extension, make sure that the vehicle is still roadworthy.
You can contact your funder for a list of approved repair and maintenance services still operating.
Alternatively, for general repairs and servicing, a new website has been launched by Cazana called KeyworkerGarages.co.uk to help all those who are on the front line fighting COVID-19 stay mobile during these unprecedented times. It is a free website that contains vital information on the service centers that are still offering motor support services to key workers. Simply type in your postcode and the nearest working centres appear.
We hope this has given you a good overview of some of the issues and answers facing a small fleet during the coronavirus outbreak.
Naturally, we may not have covered everything. So, rest assured we are still here to offer you help and advice. Please do call.
And if you are looking for a new company vehicle for your fleet, we can still help you with that too.
You can reach out to us on 0800 043 2050 and we'll be there to assist in the running of your fleet.