2021 and the fleet industry – a year for change?

2021 and the fleet industry – a year for change?

(Posted on 18/01/21)

Following a turbulent 2020 the motor industry and company car fleets will be hoping for a more stable year.

With a European Trade Agreement in place and the results of the vaccine on the horizon many fleets will be looking forward with some degree of hope.

There will be changes announced in the next few months which will have a direct impact on the way fleets operate with the impending budget and the government’s desire to intensify the push to electric vehicles.

We look at some of the issues likely to affect you:

 

March Budget

This year’s budget will set out the next phase of the plan to tackle the virus and protect jobs and will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR) on March 3.

There is speculation that it will include a fuel duty increase as the Chancellor looks at ways to recoup some of the £300 billion the government has spent supporting the economy during the pandemic.

There will undoubtedly be some tax increases, whether this is from capital gains or income tax there may be some impact on company car drivers. In June 2020, the Committee on Climate Change (CCC) recommended that a reform of VED should begin this year as it works towards reducing the number of high-emitting cars. This could feature in the budget.

 

Tax changes

The government deducted two percentage points of BIK off the rates used for older, NEDC-assessed cars last April.

This will reduce further to 1% in 2021/22 and will disappear completely the following year. So, if a vehicle was tested under WLTP and has higher on-paper CO2 emissions than an NEDC-tested car, there will be no reduction in BIK from April 2022.

From this April the rate for zero-emissions cars will increase to 1%, then to 2% the following year. The rates for cars with emissions of 1-50g/km will remain the same for the next three years.

Van fleets will also see changes from this April. The government wants to incentivise the uptake of zero emission vans. Employees who are provided with a company van, which is made available for private use will benefit from a zero-rate benefit charge if the vehicle has zero emissions.

 

Lease Rental Restriction

From April 2021 the CO2 threshold for Lease Rental Restrictions will reduce. Currently fleets with vehicles of 110g/km CO2 can reclaim 100% expenses for the lease cost which is deducted against income or corporation tax.

CO2 emissions               Allowed rentals             Disallowed rentals

110 g/km or below       100%                           0%

Above 110 g/km           85%                             15%

For contracts entered in to from April 2021, tax relief for leased cars will be limited according to new CO2 emissions.

CO2 emissions               Allowed rentals             Disallowed rentals

50 g/km or below         100%                           0%

Above 50 g/km              85%                             15%

 

Zero emission vehicles and road pricing inquiry

An inquiry was launched just before Christmas and will look at the implications of accelerating the shift to zero emission vehicles and the potential for introducing road pricing, or pay-as-you-drive, schemes.

The committee wants to hear views and welcomes submissions from anyone with answers to the questions in the call for evidence. Views must be submitted by February 17, 2021.

 

Electric vehicle boom

Despite the global pandemic, the UK’s electric vehicle (EV) market continued to thrive in 2020 and we expect this to continue in 2021.

EVs currently account for 10% of new cars sold and there are plenty of new models lined up for the coming year. There are a large number of main stream and premium new models from manufacturers across the globe.

New electric models launching this year include:

Citroen e-C4                                                                       Mercedes Benz EQA, EQB, EQV. EQS

Volvo XC40 Recharge P8                                                Audi RS E-tron GT, Q4 e-tron

Lexus UX300e                                                                    Mazda MX-30

BMW iX3, iX, i4                                                                  Cupra el-Born

Fiat 500                                                                                 Lotus Evija

Hyundai Kona Electric refresh, Ioniq 5, Ioniq 6     Porsche Taycan Cross Turismo

Vauxhall Mokka-e                                                            Volkswagen ID 4

Nissan Ariya                                                                        Skoda Enyaq iV

Jaguar XJ                                                                              Tesla Model S Plaid, Model Y, Roadster, X Plaid

Kia 2021 EV                                                                        MG E-Motion

 

Climate change summit

The UK will host the 2021 UN climate change summit in Glasgow from November 1 – 12. In partnership with Italy.

As well as the targets for a switch to electric cars, the government has pledged to reduce the UK's carbon emissions to "net zero" so almost no carbon - by 2050.

It is part of a worldwide plan to reduce greenhouse emission gases by more than two thirds.

 

Eco plates

Green number plates will be introduced this autumn under government plans to drive the green economic recovery even further.

Drivers could benefit from local initiatives such as cheaper parking and cost-free entry into zero-emission zones where those with a green number plate will be recognised as eligible.

The plates will be identifiable by a green flash on the left-hand side and will be available for zero emission vehicles only.

 

Fleetsauce

Fleetsauce is committed to providing fleets with the most efficient vehicles possible alongside a range of fleet management services. We focus on whole life costs to achieve the best possible deal for your vehicle(s). We have a range of offers on electric and hybrid vehicles.

For more information contact us:

Website               www.fleetsauce.co.uk

Email                     info@fleetsauce.co.uk

Call                         0800 0321 433

Social                    Facebook Twitter LinkedIn

 

USEFUL LINKS

https://committees.parliament.uk/work/900/zero-emission-vehicles-and-road-pricing/

https://www.gov.uk/guidance/company-car-benefit-the-appropriate-percentage-480-appendix-2

https://www.gov.uk/government/publications/income-tax-changes-to-the-van-benefit-charge-from-6-april-2021/income-tax-changes-to-the-van-benefit-charge-from-6-april-2021

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