Ralph Morton, business motoring expert
Ralph Morton, business motoring columnist
August 2011: Ensure you use the correct company car business mileage rates
Business owners in Peterborough should check they are using the correct business mileage rates for company car drivers.
The rates, which are known as Advisory Fuel Rates (AFRs), now commence every quarter – since June 01, 2011 – having originally changed every six months unless fuel prices rose or dropped by more than 5%.
The latest quarter commences on 01 September 2011 – although the only change from the previous quarter is in the LPG rates.
If businesses use the correct AFRs, their company car drivers won’t be liable for any free fuel tax liability; and businesses themselves won’t have any National Insurance liability.
If your company pays for all fuel, company car drivers can repay the business mileage element using the AFRs – and again avoid any tax liability.
The new rates – with different payment amounts for petrol company cars and diesel-engined company cars – are as follows:
Advisory Fuel Rates from 01 September 2011 for petrol and LPG cars (including hybrids)
Engine size
1400cc or less: 15p (petrol); 11p (LPG)
1401cc to 2000cc: 18p (petrol); 12p (LPG)
Over 2000cc: 26p (petrol); 18p (LPG)
Advisory Fuel Rates from 01 September 2011 for diesel cars
Engine size
1600cc or less: 12p
1601cc to 2000cc: 15p
Over 2000cc: 18p
These rates only apply if you have a company car. If you use your own private car for business, the rates you should be using are the AMAP (Approved Mileage Allowance Payments). These are 45p per mile for the first 10,000 miles in a tax year; and 25p per mile thereafter.
Whichever category you fall into, though, make sure you record your business mileage properly – approximations won’t do for the taxman.
Author Ralph Morton is editor & publisher of Business Car Manager magazine (www.businesscarmanager.co.uk). He was named Business Writer of the Year in the Guild of Motoring Writers Awards 2009.
December 2010: challenge that parking ticket!
PARKING tickets: those delightful yellow tickets stuck to your windscreen when you return to your car can really ruin your day.
They certainly are a business hazard, whether a business meeting overruns and your paid-for time expires or if you’re in the delivery business and parking your van in a restricted area is the only option.
It’s frustrating, costs pointless money, and involves you in unnecessary paperwork.
We’re talking here about the PCN – or Penalty Charge Notice – in other words a parking ticket.
However, don’t believe you should accept the inevitable. So before you rip the yellow package in its plastic sleeve mercilessly off your windscreen, take a few moments to look around you.
That’s certainly the advice of Anton Balkitis and Lucy Wood, who are specialist transport solicitors at the law firm Rothera Dowson Solicitors.
They suggest that before you get back behind the wheel, you should check the area for parking signage.
“Is there any? If so, is it clear, easy to spot, in a good state of repair?” says Anton.
“If not, there’s a possibility that in the eyes of the law the contravention did not occur. You should also try and get photographic evidence – the camera in your mobile will do – if the sign is misleading or illegible due to vandalism for example. If you don’t do this, you won’t stand a chance of challenging the fine.”
Lucy adds: “Another way to find out whether or not the PCN is valid is by checking if it has been filled out correctly. It should list the reason that it was given, the amount of fine to be paid, the deadline for payment, a reduced fee amount for payment within 14 days, a statement of notice if the fine is not paid within 28 days, and lastly a return address. If it is missing any of these details, you have legal grounds to appeal as the ticket is invalid.”
Mounting a PCN challenge
When you receive the council’s ‘Notice to Owner’ there will be a form that enables you to challenge the PCN. The Local Authority can either accept or reject the challenge. If it’s rejected, there are two options.
You can either pay the fine and get on with life; or appeal to the Traffic Penalty Tribunal. However, if you do appeal you’re likely to lose the reduced rate because this will have expired by the time the appeals process concludes.
Furthermore, if the appeal is rejected for a second time you’ll be billed for the full amount as opposed to the reduced sum.
So what should you do next?
As the vehicle owner you need to respond to the rejection within 28 days, either taking the decision to pay the fee or to make an appeal.
“The way to winning an appeal is in the supporting evidence,” says Lucy. “You must obtain photographs of signage, road markings (or lack of them), and particularly important for van drivers, a delivery receipt or witness statement if you received a ticket while making a delivery. The tribunal is sometimes more lenient if there are mitigating circumstances that attributed in some way to the PCN, so include these in the appeal.”
However, whatever you do, you should not ignore the Notice to Owner. That’s fatal, warns Anton. “The council is likely to take debt recovery steps, making it really important to have a procedure in place ensuring PCNs don’t end up at the bottom of a pile of paperwork.”
Anton continues: “The Traffic Penalty Tribunal is the last chance to get the PCN overturned, so make sure as much supporting evidence has been gathered before filing an appeal. If you fail at this stage it’s usually a good indication that you should pay the fine and get on with life. Pursuing it further will be time-consuming and may incur legal costs.”
Of course, if you do succeed in appealing your PCN, you get that nice warm feeling of keeping cash in the bank and the glory of winning a small victory in the PCN war: business drivers, one, parking attendant, nil.
Business Car Manager is the business motoring magazine for small businesses. You can access it for free by logging on to www.BusinessCarManager.co.uk
December 2009: VW’s Polo is Car of the Year
I DON’T think anyone would disagree at Business Car Manager. The VW Polo is a very fine car to win the Car of the Year 2010 award. However ingenious the Toyota iQ might be with its clever design miniaturisation, the grown up feel of the VW Polo, its innate refinement, won over this year’s jurors as it has done us.
Why? Well, there are very few cars so small that are so complete. If the iQ is a masterpiece of liberating space from compact dimensions, the Polo is a masterpiece in the distilling of the Golf’s key virtues – solidity, reliability, engineering, excellence, value for money – and reproducing them in a more compact package.
In fact, if you only had to buy one car for your business then we would recommend the VW Polo 1.4 SE. It might not sparkle like a Fiesta, but it’s a small car with a grown up attitude. It’s a winner for us; and a winner in the Car of the Year.
How the cars stacked up in COTY 2010:
- VW Polo, 347 points
- Toyota iQ, 337 points
- Vauxhall Astra, 221 points
- Skoda Yeti 158 points
- Mercedes-Benz E-Class 155 points
- Peugeot 3008 144 points
- Citroen C3 Picasso 113 points
Heed these traders’ warnings
A couple of useful warnings from two small business owners. The first, a local trader with a van, told me about his experience when he innocently forgot to tax his van.
“I’d insured it, MOT’d it, serviced it, but because no reminder turned up in the post completely forgot to tax the van.” One clamp and a fine later, the local trader suggests making a note in your electronic diary, or organizer, about the tax renewal. “Believe me,” he says. “I wouldn’t want to go through that again.”
The second, who runs his own micro business, this time with a rather upmarket BMW 7 Series. I bumped into him the other day and he told me this salutary lesson. “I got a minor mark on the rear wing. I hate that sort of thing, so I took it to my local BMW dealer. Do you know what they wanted to charge me just to touch it up? £850! I am not, he said walking out of the dealer’s smoked glass doors, a mug.”
Quite right. It’s much easier to use one of the mobile smart repair agents. The one I’ve used before is Chips Away. But there are plenty of others. They come to your house or business, do the job efficiently, and leave your car all sparkly. And the cost? For small marks, around the £100 mark. Which is rather better than the scandalous £850 from BMW.
Efficient driving
There’s a lot to be said for a spot of efficiency, especially when it comes to cars or vans. Fuel has been creeping back up to new heights of financial misery. Worse, it’s unlikely to stop there.
At the end of December, the cost of fuel will rise thanks to the rise in VAT. And then later in 2010, we’ll get another rise in fuel duty. So if you haven’t thought about driving efficiently, you might want to start thinking about it right now.
What is efficient driving? Well, it’s changing up early into a higher gear as soon as practical; not jamming on the brakes all the time; adopting a smoother style; driving at 70mph on the motorway, not at ‘motorway speeds’. The savings in fuel can make a big difference.
But the gain isn’t only financial – you’ll need to fill up fewer times – but your driving should become safer, more considerate. And you should find that your stress levels decrease.
It’s not just car drivers, though. Van drivers should think about adopting a smoother style – and saving on the bottom line. To help van drivers achieve this, the government has just launched the Van Best Practice programme.
A couple of guides are available for free, which you can access by either calling 0300 123 1133, or by visiting http://vanbestpractice.businesslink.gov.uk and looking for the downloads marked: The Efficient Vans Guide; and the Fuel Management Pack.
Download those, put the tips into practice – and start saving money. Along with the environment.
Business Car Manager is the business motoring magazine for small businesses. You can access it for free by logging on to www.BusinessCarManager.co.uk
August 2009: It’s a load of scrap
THE car scrappage scheme – it seems to doing rather well. It has stimulated car sales to the extent that we’re already halfway through the government’s grant allocation of £300m with orders reaching 154,927.
The majority of the ‘cash for clunkers’ has gone towards stimulating sales of smaller cars. Hyundai has done well with its i10 model, the manufacturer entering the best selling top 10 car makers for the first time ever in July.
Removing older cars – and vans – has also had the desired side-effect of lowering CO2 emissions (as well as providing drivers with safer cars equipped with anti-lock ABS brakes, airbags and, in some cases, anti-skid ESC technology).
According to the Department for Business, Skills and Innovation, new cars bought under the scheme have CO2 emissions that are 25% lower than the cars scrapped. The average CO2 figure for scrapped cars is estimated to be at least 179g/km, compared to a much lower 134g/km emissions average for cars bought through the scheme. In terms of company car tax, that’s equivalent to swapping a petrol car in the 23% company car tax category for one in the 15% company car tax band. That’s a big drop.
If you think you and your business could benefit from the £2000 incentive (£1000 each from the government and participating car makers), then it’s worth thinking about it fast before the funds are exhausted.
To qualify for the scheme, your existing car or small van (not exceeding 3.5 tonnes) must have been registered in UK on or before 31 August 1999 and currently you must be the registered keeper (and continuously for 12 calendar months before the order date of the new vehicle).
The new vehicle can be a car or small van up to 3.5 tonnes and must be declared new at first registration in the UK with no former keepers. It must be registered to the same registered keeper as the vehicle to be scrapped. Your local dealer will take care of the paperwork for you.
Clogged up diesel particulate filters
A friend of mine runs a small business called Turning Circle Solutions. I helped Tim, as I have before, with his choice of car. With two Audi A3s under his belt, Tim wanted a change and I helped him draw up a short list.
I then put Tim in touch with our local BVRLA-approved car leasing broker Concept Vehicle Leasing – the director, Paul Bulloch, contributes occasional articles to Business Car Manager. And eventually Tim settled on a rather plush Jaguar X-Type estate diesel.
So far so good. Until Tim’s Jaguar went into limp home mode one day. It’s the classic issue of the Diesel Particulate Filter (DPF) clogging up.
DPFs are useful because they remove most of that horrendous black tailpipe soot produced by diesel engines. However, as the soot collects, it also needs to burn off at a high temperature. This has to be done on the motorway where a consistently high speed generates the necessary heat for burn off to take place.
But, unless you mix your town driving with motorway work, then you could experience exactly the same issue as Tim. And a replacement DPF can cost up to £1000.
My advice is to consider what you need the car for before you place your order. Small businesses shouldn’t automatically consider a diesel is the best solution just because it has become almost the de facto choice for company car drivers on large company car fleets.
If your driving is mainly town or urban based then you would be much better off with an economical petrol car. If you do have mixed driving requirements, make sure you regularly combine longer journeys with the shorter ones. Otherwise you could come unstuck.
Like Tim.
Seat belt anniversary
Let’s hear it for seat belts. This remarkable life-saving device is now 50 years old. And our thanks must go to Volvo. And, in particular, Nils Bohlin.
Nils, an engineer, had been working for SAAB’s aero company where he had designed the catapult seat for the Swedish fighter aircraft J35 Draken. But then he was recruited by Volvo.
For Bohlin this must have been a radical adjustment: at SAAB his job was to throw people out of a speeding vehicle; at Volvo, his job was to keep people in their place.
In 1958 Volvo patent Nils Bohlin’s three-point safety belt. His design had four important properties: 1) The system consisted of a lap belt and a diagonal belt; 2) the belts were anchored at a low attachment point beside the seat; 3) the belt geometry formed a V shape with the point directed toward the floor, and; 4) the belt stayed in position and did not move in an impact.
In 1959, the three-point belt was launched in the Volvo Amazon (120) and PV 544, making Volvo the very first car maker in the world to equip its cars as standard with three-point safety belts.
According to Department for Transport research, annually about 565 people die in traffic accidents by not wearing a seatbelt. In 2007, over 300 of these might have survived had they been belted in. Combined with airbags, the 50-year-old three-point seatbelt is a major life saver.
So thanks Nils – and Volvo.
Ralph Morton is editor of www.BusinessCarManager.co.uk, a business motoring website dedicated to small businesses.
July 2009: Asking for help
USING best practice is something we could all do better. But particularly, it seems, when it comes to being a small business and running business cars efficiently.
Even though a scary one in every 56 businesses will cease trading this year – an increase of 59% according to accountants and business advisors, BDO Stoy Hayward LLP – small businesses appear less inclined to follow some of the best practice from larger enterprises.
The leasing company Arval has researched the small business market place and discovered that small companies are less likely to seek help to manage down their company car costs.
And while larger companies favour contract hire as a means of providing company cars, most small businesses are still wedded to the idea of ownership. And some 33% don’t even have a company car policy.
Now, while I’m a great believer in having and financing the cars that suit your business, I believe strongly that not all small businesses are aware of the alternative funding methods out there available to them.
For example, a canny small business might be quite happy purchasing used cars because: a) they save on the depreciation; b) it provides them with an opportunity to have a smarter car than they could afford new. For example, my landlord, Peter Edney, runs his own small accountancy practice, but purchases used Mercedes. His latest is a very smart 11-year-old SL V8.
But I bet many small businesses aren’t alive to the fact that ownership of new cars ties up capital that could be more readily used in the business – especially now, when cash flows are so tight.
On the other hand, leasing a car – whether through contract hire or personal contract hire – gives you access to a brand new car for a fixed monthly sum, while keeping other lines of credit (bank loan, overdraft and so on) open for purely business use. At the end of the two-, three- or four-year term, the car is returned. And a new lease on a new car started. Small businesses should talk to their local dealer business sales, BVRLA approved car leasing broker or contract hire company for more on the benefits of leasing.
The forgetful zone
While we’re on the subject of research, I came across this from Continental Tyres: on average a third of most people’s journey will be zoned out. In other words, unaware or inattentive of the actual traffic conditions around them.
The research found the average driver is on the road for 45 minutes a day and that they are in their own little world for 17 minutes of this time. They make an average of three trips in their car each day. They are distracted at least three times on each journey and for at least four seconds each time. At just 40 mph a car will travel over 18 metres every second.
I spoke to Continental’s Guy Frobisher about the results. “Our fast-paced lives can mean little time to fit everything in, but driving is no time for multi-tasking,” Guy explained. “Our advice is to avoid distractions like eating or drinking or making a phone call, even if hands-free. You could prevent an accident.”
I couldn’t agree more.
For the record, here are the most common driver distractions. But the one that scares me the most is number 11. If your small business doesn’t have a company car policy – particularly for mobile phone use – then now is probably the time you should.
TOP 20 DRIVING DISTRACTIONS
1. Re-tuning the radio/inserting a CD into the player
2. Talking to a passenger
3. Looking at scenery
4. Eating
5. Listening to loud music
6. Reaching into the glovebox
7. Looking at houses
8. Drinking
9. Other drivers in cars next to you
10. Passengers asking questions
11. Texting
12. Trying to unwrap a sweet
13. Talking on the mobile phone
14. Looking at a hot girl/bloke
15. Shop windows
16. Kids in the back seat shouting, or playing up
17. Trying to read a map
18. SATNAV
19. Looking at billboards
20. Singing
Changes to the website
We’ve introduced some more features to www.BusinessCarManager.co.uk that should make it even more useful. There’s a company car tax calculator, so you can work out your car tax. Business Car Manager has also become an approved partner of the HMRC – so we have an area where you can download HMRC advice on everything from starting a business to the ins and outs of VAT.
Of course, we’ve also got plenty of advice for ensuring you have to pay as little money as possible to the tax man, too. Including a brand new download called The Big TAX Change. If you run company cars, it’s vital you read this. You can download it here: www.businesscarmanager.co.uk/pages/downloads/TheBigTAXChange.pdf.
Finally, we also have an RSS feed, so you can automatically keep updated when we upload a new story on the site.
Ralph Morton is editor of www.BusinessCarManager.co.uk, a business motoring website dedicated to small businesses.
June 2009: Ralph explains why leasing looks a good low-cost bet
CREDIT from banks is still difficult to obtain. Earlier this year, the Federation of Small Businesses (FSB) reported that banks were still holding back funds from viable small businesses.
And in its most recent survey, the CBI reported that access to finance remained a serious problem for businesses, although the rate of deterioration in credit conditions had slowed.
To make matters worse, business owners turning to unsecured lending for their cars are only finding that rates have become exorbitant.
A Moneyfacts.co.uk survey found that the rates on unsecured loans had increased by much as 44% over the last two years – in some cases rising from 8.6% in May 2007, to 12.4% today, despite bank base rates being at an all time low.
Leasing, on the other hand, looks a much better option; an easier way to access funding for business cars. The beauty about leasing – whether on contract hire (CH), personal contract hire (PCH) or personal contract purchase (PCP) – is that you have access to an additional line of credit. You don’t tie up bank loans and overdrafts that your business will invariably need at a time when cashflow is tight and working capital at a premium. And with regular monthly rental payments, the costs can be budgeted and aren’t prohibitive.
Of course, during such economic turmoil, long-term leasing might not be the right option for your business. But that shouldn’t hinder your company’s sales aspirations. There are plenty of opportunities to opt for short-term leasing over, say, three or six months. While the rental will be slightly higher than a longer-term lease, it remains a cost-effective way to manage trading expenses in turbulent economic conditions.
And, finally, the other good reason to consider leasing now is that car leasing costs – since April 1st – are fully tax-deductible for all cars with emissions below 161g/km. Even for those cars with emissions of 161g/km and above, 85% of the rental can be put against the profit and loss account.
So if leasing hasn’t been on your radar before, it really is worth considering now.
Don’t be a dip-stick
Drivers are ignoring basic checks on oil levels with the cost of covering failed engines exploding in the face of business owners. A new engine can cost about £1500 – but in some cases as much as £4000.
To some extent, cars these days have so many facilities to take away responsibility from the driver, along with extended service intervals, that it’s little wonder drivers are lured into a false sense of security. But such negligence could cost your businesses money.
Modern diesel engines in particular can consume a lot of oil. So it’s a good idea that as part of a staffer’s contract for having a company car, you list some of the essential checks you expect them to carry out each week: oil, tyre pressures, and so on. It could save your business thousands of pounds.
Takeaways ease the stress
Indian takeaways are the ultimate stress busters. Apparently. Eating a spicy curry – and the spicier the better – helps our bodies release ‘feel-good’ hormones says one of the leading takeway portals, www.Just-Eat.co.uk.
The top five mood enhancing curries are:
- Chicken/Beef Madras
- Vindaloo
- Thai red curry
- Pasanda
- Jalfreizi
So the next time you’re driving home after a stressy day at the office, and can’t be bothered to go to the gym, head for the curry house instead. And feel better the foody way!
Ralph Morton is editor of Businesscarmanager.co.uk, the number one website for managing cars in small businesses.
