In addition to the obvious costs such as vehicle depreciation, insurance, cost of finance etc, there are additional costs to be incurred in operating a fleet – and here by choosing vehicles with low emissions – such as the Vauxhall ecoFLEX range – you can reduce your costs substantially.
Low emissions go hand-in-hand with low fuel consumption, but there are bigger savings to be enjoyed, as much of vehicle-related taxation is designed to encourage ‘cleaner’ vehicles.
Until March 2013, cars with emissions of 110g/km or less can benefit from 100% first year Writing Down Allowance (WDA) – allowing businesses that purchase their vehicles outright to write-off the whole of the capital cost of their investment against taxable profits for the period during which they make the investment. This means a helpful cash flow boost AND can help shorten the payback period
For cars with emissions of between 111 and 160g/km (and that includes ALL our ecoFLEX models – and indeed most Vauxhalls) the Writing Down Allowance is 20% per annum (18% from 2012/13 tax year), while for cars with emissions of over 160g/km, a WDA rate of just 10% per annum (8% from 2012/13 tax year) applies.
NICs are due on most taxable benefits – including car and fuel benefits – and are paid directly by the employer.
Like Benefit-in-Kind taxation, Class 1A NICs are based on the vehicle’s CO2 emissions, so the ‘greener’ the car, the lower the company’s tax bill. Indeed, they are calculated in the same way as Benefit-in-Kind, as shown below:
Example of NIC paid on car benefit:
Diesel powered car with OTR of £18,000 and emissions of 110g/km (2011/12 Tax Year)
List price of vehicle for tax purposes (P11D value): £17,945
Car benefit charge (13%): £2,332.85
NI Contribution (13.8%): £321.93
Example of NIC paid on fuel benefit:
HMRC Fuel charge ‘flat rate’: £18,800.00
Car benefit charge (13%): £2,444.00
NI Contribution (13.8%): £337.27
How much Vehicle Excise Duty (road fund licence) is payable on a car now depends on its CO2 emissions – and once again, lower is better.
The 2011 Budget announced that from 1 April 2011, VED rates will increase in line with RPI inflation and Heavy Goods Vehicle rates will be frozen.
Vehicle Excise Duty bands and rates for cars registered on or after March 2001 (graduated VED)
VED Band
CO2 emissions (g/km)
2011-12 *1 Standard Rate *2
2011-12 *1
First Year Rate *2
M
Over 255
£460
£1000
A
Up to 100
£0
£0
B
101-110
£20
£0
C
111-120
£30
£0
D
121-130
£95
£0
E
131-140
£115
£115
F
141-150
£130
£130
G
151-165
£165
£165
H
166-175
£190
£265
I
176-185
£210
£315
J
186-200
£245
£445
K
201-225
£260
£580
L
226-255
£445
£790
Images shown are for illustrative purposes only, and may show optional equipment.
*1. 2011-12 rate is applicable until 31 March 2012. *2. Alternative fuel discount: 2010-11 onwards £10 for all cars.
* excludes fuel & lubricants; congestion charges; parking and speeding fines and the £250 insurance excess (if applicable)
