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Taxing issues
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In April, theTreasury hiked the benefitin-kind tax charges for van drivers using company vehicles for private use from £50010 £3,000 a year, or £3,500 a year if fuel is provided.While only time will tell how rigorously tax officers will apply the new rules, it is clear there is now a bigger onus on van operators to monitor more closely the private mileage their employees are doing.
Vehicle tracking systems, or systems that identify drivers and record when the ignition system is switched on or off, can help companies monitor private use. Proof that vehicles are stationary outside working hours is easily obtained from historical tracking logs, points out Quartix. Many tracking logs will provide a breakdown of businessiprivate mileage for each day and week.
Another option is to use the tracking system to set up a geofence' around the company premises. Any vehicle that leaves the premises outside normal working hours is deemed to be being used privately.This doesn't cost anything and can be set up easily on the tracking company's website.
FleetConsult UK, which markets the Dutch-made Accredis mileage-capture device in the UK, says many van fleets are risking paying more tax at the end of the year. It points out that the PAYE bill is reduced by the amount that the employer claws back from the employee. For example, if an employee drives 2,000 private miles at a cost of 30p per mile, the charge is £600.The benef it-inkind charge is cut by the amount that the employee has contributed, from £2,900 to £3,500.The employee will now pay tax on £2,900, not £3,500, reducing the tax payable at 22% from £770 to £638.The employer National Insurance contribution is reduced to £371.20 instead of £440 and the company will also have recovered the cost of the fuel and running costs (£600).
Wirral-based Penketh's delivers to 1,000 customers from a central warehouse. It wanted to increase capacity on its 10 routes and improve customer response times. The challenge for the company's call centre was being able to pinpoint the exact location of drivers so it could give customers precise delivery times. Typically, this would involve the customer call being logged and a member of staff then calling the driver to determine his whereabouts and recontacting the customer to inform them.
Also, as more customers were coming on board, the set pattern of deliveries needed to change. Managers needed to see how many deliveries each vehicle was doing and which routes could include more drops. Since it installed Trakm8 SWIFT, Penketh's has been able to restructure its operation and increase productivity. The company calculates that it has already brought £35,000 of savings.