Company cars – advisory fuel rates from 1 March 2011

These rates apply to all journeys on or after 1 March 2011 until further notice, allowing them to reflect fuel prices more quickly. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.

1400 cc or less: Petrol 14p, diesel 13p, LPG 10p

1401cc to 2000cc: Petrol 16p, diesel 13p, LPG 12p

Over 2000cc: Petrol 23p, diesel 16p, LPG 17p

Following a recent case in the First Tier Tribunal, a potential National Insurance Contribution (“NIC”) refund could be due to you as an employer and to your employees if you:

• pay a business mileage payment of less than 40p per mile

• pay a lump car sum allowance to your employees for the use of their own private vehicles

• have retained records to verify the business mileage

• there is no direct link between the lump sum car allowance and salary

Refunds can extend back six complete tax years and run into thousands of £’s so what do you need to do now?

To quote a Russian meerkat – it’s simples: contact us today on 0800 917 9176 to register your interest – no protective claims are necessary at this stage – it’s just a ruse by some organisations to make you panic but don’t be fooled, contact the employment tax expert today

Contact us on 0800 917 9176

Why will this government not admit that the majority of its “green” measures are just effectively a secret additional tax – take cars for example we are getting taxed to death on the price of fuel, vehicle excise duty, company car benefits etc but we are too polite as a nation when are we going to sit up and take notice that we are being conned left right and centre. If you think that’s a bit harsh then think about it

• what is the cost of oil – has the price risen or dropped – what about the price of fuel
• Road fund tax – what is this being spent on because it certainly isn’t roads and we now have a “special” allocation in the Budget for road repairs – where is this money coming from?
• public transport – trains are like meat wagons but remember you’re not paying for a seat just the privilege of auditioning as a sardine
• allowances mentioned in the Budget are currently a sham – a reduction by half of the percentage used to calculate the taxable car benefit if the car has a CO2 emission level of between 0 -75g/km sounds good but the FACT is there aren’t ANY cars in this country with emissions this low, the lowest is 88g/km – so what an excellent “giveaway”
• Electric cars – where is the infra structure to support them

So this employment tax expert says forget all the spin that’s out there and look at what you can do for you and your employees, because you can:

• Save tax and NIC
• Be enviromentally friendly; and
• Keep both your employees and the Board Room happy

Employee car ownership schemes and car salary sacrifice schemes are a real winner if constructed correctly – what have you got to lose, give us a call on 0800 917 9176 and see how we can shape the enviromental future of your car scheme as well as saving you money

April 2011 all hail the massacre that is increased NIC but there is light at the end of the tunnel – salary sacrifice schemes and employee car ownership schemes to name but a few.

The PBR as to be expected was an election based exercise – do they think we are all stupid, put off the nasties until we are back in power!?! and bring forward  “for one year only” increases in some benefits. This was certainly getting back to the old battle lines between the parties – labour: earn under 20k and we are the party for you, conservatives, earn over 20k and we’re the party for you – well actually no because there is a whole band of people caught in the middle who technically speaking “get screwed” every time.

So we have action against avoidance schemes – now remember avoidance schemes are legal, it’s evasion that’s not. This employment tax expert hopes that as much effort is put into getting people to pay tax who should rather than hammering those that are genuinely trying to get the excessive demands of our tax system correct. Offshore accounts – it’s your final warning, it really, really is this time and so it goes on the number that have come forward is minute compared with the problem – so let’s be a bit more creative to get these people back into the tax system

and don’t get me started on garlic peelers and painting summer houses – yes the MPs expenses debacle carries on  – but that’s for another day …

So we have the pre budget report today when we theoretically find out the true scale of the national debt and what the government propose to do about it. However, as always seems to be the practice these days, it’s not just a question of looking into a crystal ball but also doing a bit of brain trainer to recall exactly what was mentioned previously that will also be brought in now – following this so far?

In yester year we used to just have a Budget and that was relatively straight forward but now we have the PBR which allows whoever is in power to map out their budgetary vision for the next x number of years. However, this time round this has been blown out of the water somewhat by the fact that we are due an election in June 2010 and David Cameron has come out and said he will have another Budget within 50 days of being in office – still following?

So pin back your ears today as there may be more to this one than meets the eye. For all you practitioners out there we know the devil is in the detail, pages and pages of it in fact to wade through in order to get past the smoke and mirrors but the bottom line is a really interesting point – pre election budget v. the prudent protector of our economy (where we are all in this together and we all have to make sacrifices – yeah right, anyone forgoing their £m plus bonus – hardly think so,  let’s completely muller SME’s, working/middle class etc as usual) and this employment tax expert for one gets well hacked off with the smoke screen of “green” issues – saving the planet or an excuse for increased taxes – mmmm that’s a difficult one

Carry on watching for updates ….

I like many people had hoped that our taxation system would be made simpler but no it seems like one more administrative burden after another. An example for you with something as seemingly innocuous as a change in the Advisory Fuel Rates. These are rates published by HMRC for use by employers who either reimburse the cost of business fuel to their company car drivers or where both business and private fuel is initially paid for by the employer, usually when a fuel card is used, the employee to avoid a company car fuel scale charge reimburses their employer the cost of private fuel.

The latter option is always the most dangerous because any amount of private fuel not reimbursed leads to a fuel scale charge, which is a hefty benefit in kind that HMRC will pursue the EMPLOYER for, together with Class 1A NIC – imagine that cost if you’ve been getting it wrong for a few years!

So most employers pay AFR’s which used to be reasonably straightforward before we had the massive increases in the cost of petrol and diesel. Now employers face the constant “discussions” with their employees over what rate they should receive, as prices fluctuate. HMRC like the teflon kid (non stick if you’re feeling a bit slow this morning) simply point to the fact that they are only “Advisory” rates and that employers can pay higher rates if they can prove that they are justified – more admin v disgruntled employees

So what has now happened – well previously HMRC would give a month’s notice of a change in the rates, so allowing employers sufficient time to change their systems. Not now this one month’s grace has been removed and if you didn’t pick it up the new rates were announced on Friday, so for most employers that would have actually meant this morning, 30 November with the rate change from 1 December ie tomorrow – madness!

It’s like a game where the rules keep changing and if you get it wrong there’s penalties etc accumulating.

If the rates go up and you don’t spot the changes then you may be paying less than you can – I’m sure those employees will be telling you and you will need to make (if you want) a correction – more admin! but the contra side of this is that if employees have to reimburse you then you will have problems because they won’t be reimbursing enough and oh what joy from HMRC – private fuel scale charge

What happens if you only pay business mileage and the rates go down and you don’t spot them – feel the pain

This is just another trap that unsuspecting employers can and will fall into and wait for your next employer compliance review, tax investigation – this employment tax expert bets that this is an area where there will be a heightened level of interest – so be warned!

Yes that’s right – in this era of doom and gloom both employers and employees can save a lot of money and not be tied to ever increasing car benefit and car fuel benefit charges simply by looking at how they provide cars to their employees. Don’t get confused with ever increasing taxation on these benefits, in the name of “going green/saving the planet, enviromentally friendly” it’s all crap – we’ve a national debt to feed and it’s got a monstrous appetite – remember this when it comes to the Pre Budget report.

So remove yourselves from this farce, it’s a fantastic idea, tailored specifically to your company and with HMRC approval, employees love it and even better you as the employer keep control and meet your duty of care and corporate manslaughter responsibilities.

Not come across it before? Thought about it some years ago but were a bit afraid of it – well those employers that weren’t have saved £millions – now don’t tell me that you wouldn’t be interested in that. So if you have a company car fleet or are even running a cash for car scheme and want to join the band of smiling employers and employees and find out more about employee car ownership schemes then call us on 0800 917 9176

As you may or may not be aware there are a number of creative car scheme options in the market place. However, and this is a really serious warning – you need something that is bespoke to your company, fits in with your culture and most of all is communicated effectively. At EICG we do a number of options like employee car ownership schemes but what we do is to sit down with the employer and work through exactly what they are trying to achieve, we keep it as simple as possible so that it is easy to understand, unlike a scheme that was brought to me for review recently.

Reading the literature – it was badly designed, simply did not work from a technical perspective and even worse it shafted the employees. Combine this with the fact that no one at the company seemed to understand it and you wonder what this employer was thinking. Well it’s easy for an SME to get it wrong you may think but this was an international PLC. The whole way this proposed scheme has been developed and communicated is laughable if it wasn’t so serious – the employees are not thick they have asked very real questions and have got absolutely crap in response so now you have a complete air of mistrust that has been brought about because of a combination of greed from the employer and appalling communication of a scheme that should never have raised its ugly head.

At EICG we pride ourselves on the fact that both the employer AND the employees are happy with the arrangements because we go through things warts and all, asking questions, posing scenario’s so that the employer has thought through all eventualities and it is only when this process has been completed do we then communicate the scheme to the employees – face to face in non tax language so they can ask all the questions they want.

So whatever you do – believe that you can change your existing car scheme for the benefit of you and your employees but do come to a reputable service provider like EICG and we will walk you through it

If you either have company cars or a car allowance scheme have you considered what savings you could make by moving to an employee car ownership scheme?

Could your business do with making excellent savings as well as motivating your staff in difficult times then this is what you should be looking at. For all of you out there with car/cash allowance schemes are you meeting your duty of care and corporate manslaughter responsibilities as you have what is termed a grey fleet? ECOS meets all these requirements as it is a structured scheme – so what have you got to lose – have a chat, with the employment tax expert and see what it can do for your business