COMPANY CAR DRIVERS POTENTIALLY FACE BACK TAX DEMAND CAUSED BY NEW OpRA RULES, FIAG WORKSHOP TOLD

COMPANY CAR DRIVERS POTENTIALLY FACE BACK TAX DEMAND CAUSED BY NEW OpRA RULES, FIAG WORKSHOP TOLD

  • Courts “get tough” on companies and individuals guilty of health and safety breaches
  • Employers urged to relieve driver stress to improve road safety performance
  • Businesses “nowhere near” maximising the potential of telematics technology

Company car-driving employees have been warned that they could be subjected to demands for back tax from HM Revenue and Customs following this year’s introduction of complex Optional Remuneration Arrangements (OpRA) rules.

The Fleet Industry Advisory Group’s (FIAG) autumn workshop, ‘Fleet Policy – Challenges and Influences’ heard Activa Contracts’ sales and marketing director Lisa Temperton highlight that understanding and correctly interpreting OpRA regulations was one of the “major challenges” currently facing businesses.

Essentially the new rules were introduced by government to mean employees opting for a salary sacrifice arrangement or taking a company car in lieu of a cash alternative paid tax on the higher of the existing company car benefit value and the salary sacrificed or cash allowance given up. However, car arrangements in place before April 6, 2017 are protected until April 2021 and ultra-low emission vehicles (ULEVs) – currently those with CO2 emissions of 75g/km or less – are exempt from the regulation.

OpRA rules were rapidly introduced on April 6, following confirmation in last year’s autumn Budget and subsequent Finance Bill, but the impact of the changes are still coming to light. For example, it was recently revealed that the new OpRA rules should only take into account the amount of salary sacrificed for the car itself thereby excluding vehicle maintenance, insurance, new tyres and roadside breakdown and recovery for example. That means that the finance rental for a car and all other costs should be separated out making so-called “proportionality” now an issue for employers in respect of OpRA.

Ms Temperton told delegates at the workshop, which was sponsored by driver risk management specialist Automotional and held at the company’s Training Centre located within the Formula E Paddock at Donington Park Race Circuit, that when P46 (Car) forms were sent to HMRC by employers at the end of the 2017/18 tax year they could be incorrect.

“Some employees will have underpaid tax and that will cause pain as HMRC looks to recoup the tax they believe due,” said Ms Temperton, who highlighted that underpayment was likely to be caused because company payroll departments were not yet set up to handle the impact of OpRA rules on tax.

Ms Temperton took delegates on a whistle-stop tour through “50 years of political meddling with the company car” and concluded that other “current challenges” facing fleet decision-makers included:

  • The introduction of the new vehicle emissions and MPG test procedure, known as the Worldwide harmonised Light vehicles Test Procedure (WLTP)
  • “Anti-diesel” vehicle legislation including the introduction of Clean Air Zones in towns and cities nationwide
  • The impact of the new lease accounting standard, known as IFRS 16, effective from January 1, 2019, which in the fleet operating and vehicle leasing sector is mainly focused on its requirement for assets financed via operating lease – contract hire – to be brought on-balance sheet
  • Increasing demand for personal contract hire affinity schemes
  • Getting to grips with a raft of issues surrounding ‘connected cars’ and autonomous vehicles
  • The fall-out from negotiations relating to the UK’s exit from the European Union.

However, Ms Temperton concluded: “Reports of the death of the company car are greatly exaggerated. The more it changes, the more it stays the same.”

That presentation introduced a roundtable debate among delegates on the future of the company car and fleet decision-makers agreed that there was perhaps “more uncertainty” than in living memory.

Some delegates concluded that growing company car benefit-in-kind tax complexity added to demands by employees “not to be dictated to in terms of vehicle choice” could prompt a move away from ‘perk’ company cars.

However, amid such a scenario some delegates warned that could trigger the increased use of privately-owned cars – the so-called ‘grey fleet’ – being driven on business journeys, which, in many cases, was already proving to be a corporate challenge in terms of managing vehicle documentation and driver licence validation to ensure duty of care compliance. An alternative, to growing ‘grey fleet’ use, it was suggested, was a greater use of hire cars and even pool vehicles.

Meanwhile, other workshop delegates suggested that company cars continued to deliver “value for money” to employees and there would be no shrinkage in demand.

Delegates also suggested that job-need cars remained business-critical and, against a background of year-on-year increases in company car benefit-in-kind tax, required “more government support”.

Courts “get tough” on companies and individuals guilty of health and safety breaches

Company directors and senior managers inside businesses with fleet responsibility are increasingly likely to be prosecuted with organisations potentially facing fines running into millions of pounds in the event of fatal and non-fatal crashes.

FIAG workshop delegates heard specialist health and safety lawyer Michael Appleby, partner at London-based Fisher Scoggins Waters LLP, highlight the impact that the 2016 sentencing guidelines for health and safety and corporate manslaughter offences were having on organisations, directors and senior managers.

The guidelines were introduced by the Sentencing Council last year and provide for a sliding scale of financial penalties linked to the turnover of a business and level of culpability.

For health and safety offences the scale of penalties is: large organisation with £50 million-plus turnover £3,000-£10 million; medium size organisations with £10-£50 million turnover £1,000-£4 million; small organisations with £2-10 million turnover £100-£1.6 million; micro companies with not more than £2 million turnover £50-£450,000. Convicted individuals face a maximum sentence of up to two years jail and an unlimited fine.

For companies convicted of corporate manslaughter the maximum penalty is an unlimited fine although the guidelines state a range of £180,000-£20 million depending on the size of the company.

Mr Appleby revealed that in 2015 just three companies were hit with fines of more than £1 million for breaching health and safety regulations, but that had risen to 19 in 2016 following introduction of the guidelines with two-thirds of cases being non-fatal. Historically, he highlighted, that fines above £1 million were reserved for companies prosecuted following fatalities.

He also highlighted a dramatic increase in the number of directors and senior managers being prosecuted – up from 15 in 2015 to 46 last year. What’s more, following introduction of the new guidelines, those found guilty were now likely to receive, as a minimum, a suspended prison sentence with directors also disqualified from holding office.

Mr Appleby told delegates: “There is an increasing interest by the Health and Safety Executive (HSE) in all area of occupational health including work-related road safety. Businesses should focus on reducing potential areas of harm across the workplace, which includes managing vehicle and driver safety. Inside many organisations there is scant attention being paid to fleet safety, which is a huge area of concern. Policies and procedures must be in place to reduce the risk of exposure to prosecution of directors and senior managers as well as organisations if a crash results in a fatality.”

Employers urged to relieve driver stress to improve road safety performance

Employees suffering from stress were 50% more likely to drive dangerously and thus be involved in crashes, according to John Sunderland Wright, training director at Performance on Demand.

Drivers’ health and well-being was critical to their behaviour on the road, Mr Sunderland Wright told FIAG workshop delegates highlighting that the heart and brain were the two key areas of the body “massively effected” by stress.

“Stress can inhibit personal performance,” said Mr Sunderland Wright. “High levels of stress causes the brain to do far too much and that causes problems, which for drivers manifests itself in road crashes.”

Employee surveys frequently highlighted that stress and tiredness were issues for them but, said Mr Sunderland Wright, sleeping for eight to nine hours per night was a solution. He also advised that continually hydrating the body with water was vital as dehydration reduced concentration and reaction levels by 20%.

With driver stress being a significant contributory factor to road crashes, Mr Appleby reminded delegates that it was a major focus for the HSE in improving work-related road safety.

He told delegates: “Are drivers so stressed that they cannot do their job properly? Employers must look at their work-related road safety policies and ensure that employees that drive on businesses have the opportunity to have their views on such issues heard.”

The FIAG workshop debate on the health and well-being of drivers concluded that it was “a hot topic” and it was important that “a massive knowledge gap” across employers was filled.

Delegates suggested that many employers were “reactive” and not “proactive” in managing employees and only reacted with new policies and procedures following an “incident”.

As a result, Geoffrey Bray, chairman of FIAG, which was launched four years ago to enable fleet decision-makers to share fleet industry best practice and knowledge, said: “It is vital that employees that drive on business are given advice and information on how to relieve stress and be less tired. Information should not just be written into a company car policy, but there should be conversations and drivers should be empowered to speak up. Drivers are part of the solution and not simply the problem.”

Businesses “nowhere near” maximising the potential of telematics technology

Nine in ten businesses that fit telematics to vehicles were “nowhere near” maximising the potential of the technology to obtain a full return on investment, Phil Powell, sales director at Matrix Telematics told the FIAG workshop.

However, companies that used telematics derived data to effectively manage driver behaviour and vehicle performance reaped significant financial benefits notably in terms of reduced fuel bills, lower maintenance costs due to employees’ adopting a smoother driving style, fewer road traffic crashes and reduced insurance premiums, he explained.

Highlighting that in-vehicle technology and ‘big data’ was the future, Mr Powell said: “Employers must harvest data from vehicles and use the information gathered to analyse both driver and vehicle performance.”

During a roundtable discussion, FIAG delegates agreed that telematic systems provided a wealth of data, but flagged up concerns that with the 25 May, 2018 introduction of the General Data Protection Regulation (GDPR) information collected must be used responsibly with drivers informed the use to which it was being put.

Delegates also agreed that fleet decision-makers could be swamped with the volume of data emerging from telematics system. As a result, it was critical to both centralise and compartmentalise information and focus on highlighted “errors and weaknesses” measured against established key performance indicators so drivers and vehicles were “managed by exception”.

Meet the Team – Laura Peare

Name:  Laura Peare       

Job Title:  Accident management claims handler

Explain your role in 10 words:   Provide support and knowledge to help people when needed most

What’s the best aspect of your job?  Knowing you can help people in vulnerable situations

What’s the worst aspect of your job?  Worst case scenario accidents involving serious injury or fatality

How long have you worked at Fleet Service GB?  7 weeks! 11 years in the industry though

What was your first paid job?  Saturday job working in a bakery

What’s your favourite car?  If I have a car that works I’m happy!

What one thing would you like to achieve before you retire?   Travel the world

Outside of Fleet Service GB, what would your dream job be? Chief cider taster at Healeys/chief chocolate taster at Cadbury – don’t mind which!

Who in the world would you most like to meet?   Tom Hanks – a genuinely nice guy! Tom Hardey – shares my love for dogs and………lovely to look at too!

What is your favourite way to spend a day outside of work?  A summer day in Cornwall by the sea, with my husband and spaniel, preferably with a cider in hand!

If you won the lottery how would you spend the cash?   Buy a house, holidays around the world with family and friends

Not a lot of people know that…I once got locked in a car in the car park whilst in a previous job and a colleague had to come and rescue me!!

New central London T-Charge targets ‘polluting older’ vehicles

A Toxicity Charge – known as the T-Charge – in to be introduced in central London on October 23 targeted at the oldest and most polluting vehicle and 18 months ahead of the capital’s Ultra-Low Emission Zone (ULEZ).

The T-Charge – a £10 per day per vehicle emissions surcharge – applies to vehicles, including cars, vans, minibuses, buses, coaches and HGVs, that do not meet Euro4 standards, typically those diesel and petrol vehicles registered before 2006. It will operate on top of, and during the same operating times, as the congestion charge (Monday to Friday 7am-6pm).

The T-Charge is applicable inside the London Congestion Charge Zone and is in addition to that fee (£11.50 or £10.50 for Auto Pay customers). The T-Charge will use the same payment and operational systems as the Congestion Charge meaning that both charges will be applied, if necessary, in the same transaction.

A failure to pay the daily T-Charge will trigger a Penalty Charge Notice (PCN) – £130 reduced to £65 if paid within 14 days – payable by the registered vehicle keeper or operator.

It is widely believed that most fleet vehicles will not fall foul of the T-Charge, but Fleet Service Great Britain is aware of businesses that continue to operate some pre-2006 models.

The Buzz highlighted introduction of the T-Charge in the May 2017 issue when it also flagged up the anticipated April 8, 2019 implementation of the ULEZ urging fleet operators to check the emission standards of their current vehicles.

The ULEZ will also cover the same area as the congestion charging zone. Petrol vehicles that don’t meet Euro4 emission standards and diesel vehicles that do not meet Euro6 emission standards will have to pay a ULEZ daily fee (£12.50 for cars, vans and motorbikes; £100 for buses, coaches and HGVs) to drive in the zone, 24 hours a day, 365 days a year.

Furthermore, the Mayor is proposing to extend the ULEZ across Greater London for heavy diesel vehicles, including buses, coaches and lorries, in 2020, and up to the North and South Circular roads for cars, vans, minibuses and motorcycles in 2021.

Implementation of the T-Charge aims to discourage the use of older, more polluting vehicles driving into and within central London. It is the first step towards the introduction of the ULEZ, when tighter vehicle emissions standards will be required. The T-Charge will end when the ULEZ comes into force.

Further information on the T-Charge is available at: https://tfl.gov.uk/modes/driving/emissions-surcharge

Toll charges to be cut at Severn Crossings on the road to abolition

The government has announced the schedule for abolishing toll charges on the Crossings over the River Severn linking England and Wales.

The Crossings will revert to Government control on 8 January, 2018, after which they will be managed by Highways England.

Following that date, the tolls will no longer include VAT, and so the rate of tolls will be reduced accordingly. That is in line with the government’s 2015 Budget announcement and will mean:

  • Charges for cars and other vehicles up to nine seats will reduce from £6.70 to £5.60
  • Charges for goods vehicles up to 3.5 tonnes and small buses will reduce from £13.40 to £11.20
  • Charges for goods vehicles above 3.5 tonnes and large buses will reduce from £20 to £16.70.

Additionally, there will be no toll increase on 1 January, 2018, as there has been in previous years.

Tolling will then continue until the end of 2018 at which point all tolls at the Crossings will be abolished, as announced by the government in July.

Budget company car tax hikes will trigger ‘rapid decline’ in perk, BVRLA warns Chancellor

Continuing increases in company car benefit-in-kind tax will mean a “rapid decline” in employee take-up of the ‘perk’, the British Vehicle Rental and Leasing Association (BVRLA) has warned the government.

Chancellor of the Exchequer Philip Hammond in his Budget Statement on Wednesday, November 22 is expected to:

  • Announce company car benefit-in-kind tax rates for 2021/22 – rates up to the end of 2020/21 have already been published
  • Follow-up on a pledge made in this year’s March Budget when he served notice that the “tax treatment for diesel vehicles” could change as the government looked to cut pollution from the transport sector and improve air quality. Since then the government has published a plan setting out how the UK’s air quality goals would be achieved notably through a network of Clean Air Zones in towns and cities and encouraging increased demand for plug-in vehicles, while diesel vehicles have been “demonised” in the national media for their emissions and largely taken the blame for the UK’s poor air quality in urban areas.
  • Take the opportunity to announce how and when vehicle-related taxes – company car benefit-in-kind tax, Vehicle Excise Duty and capital allowances – currently linked to car emission levels as measured under the New European Driving Cycle (NEDC) test will be redrawn following this year’s introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP). Industry experts have suggested that carbon dioxide (CO2) emission figures on a car-by-car basis could increase by about 20% with introduction of the WLTP. As a result, it is widely expected that tax rates and band thresholds will be changed to mitigate any tax rises. HM Treasury has previously said that it would “look to agree a suitable moment to move the tax system from NEDC to WLTP. HM Treasury has also said that it did not see WLTP as a tax-raising development, but as transitional.
  • Provide an update, following a ‘call for evidence’, on any government plans to change the taxation of benefits-in-kind and employee expenses and that includes Approved Mileage Allowance Payments made to employees that drive their own cars on business journeys.
  • Answer a long-time call from ACFO, the fleet managers’ organisation, for HMRC to publish Advisory Fuel Rates for plug-in cars alongside those for petrol, diesel and LPG models.
  • Publish new Vehicle Excise Duty rates from April 1, 2018
  • Announce car and van fuel benefit charges and van benefit charge increases effective from April 6, 2018.

The company car benefit-in-kind tax rate on a model with CO2 emissions of 100g/km in 2017/18 is 19%, but that is due to rise to 25% by 2020/21. The BVRLA has urged the Chancellor to introduce a “progressive company car tax regime” that did not encourage employees to opt into personal contract hire (PCH) schemes thus potentially selecting vehicles with emissions than they might have selected via a corporate scheme.

Highlighting that the number of company car taxpayers had reduced by 110,000 over the past decade as year-on-year tax rises had driven employees into cash allowance schemes, the BVRLA has urged Mr Hammond “not to add further tax burden upon the company car market”.

The rising burden of company car benefit-in-kind tax had, said the organisation in its pre-Budget submission to HM Treasury, triggered a rise in the number of ‘grey fleet’ vehicles – employees who drive their own cars on business trips – and pointed out that those cars were invariably older and more polluting than newer company-provided models with “little or no oversight from the employer”.

Warning of the “adverse political and economic harm” of potentially raising more tax from diesel company car drivers, the BVRLA, said: “The vast majority of these employees are essential business users undertaking business journeys on the motorways and rural roads using the latest engine technology.”

It continued: “Employers operating company cars also ensure that employees only select the most suitable and fuel-efficient car, as they are responsible for the costs associated with all business trips. Punishing employers and their employees for using or selecting a diesel car would therefore be wholly inappropriate and grossly unfair. There is now a real danger that continued tax rises on this class of employees will result in a rapid decline in this type of benefit being selected by the employee.”

Consequently, the BVRLA has told the Chancellor: “We feel the government should take a fairer approach by looking at wider general taxation to help address any funding gap that may exist.”

What’s more, the BVRLA argues in its submission that company car demand should have increased in recent years as the UK economy grew following the 2007/8 recession.

It warns: “New car sales continue to fall as businesses and consumers put off commitment to major spending decisions. Successive Budget announcements have seen the overall tax take from the business motoring sector rise sharply and it is clear that they are now having a negative impact on average car CO2 emissions, which have risen year-on-year.”

Recently published BVRLA data suggested that average CO2 figures for newly registered lease cars grew to 111.8g/km in Q2 2017, up from 110.8g/km (+0.9%) from the previous quarter and up 0.7% compared to the same period in 2016.

The submission tells the Chancellor that the autumn Budget was “an ideal fiscal opportunity to help restore market confidence but importantly give a well-needed stimulus to boost the uptake of the greenest and cleanest vehicles. Our sector requires greater tax stability and certainty to flourish, both prior to and following the UK’s eventual withdrawal from the European Union”.

HMRC urged to clarify ‘what is a van’ as accountants warn fleets of tax trap

HM Revenue and Customs (HMRC) has been urged to clarify its benefit-in-kind tax guidance on company cars and vans with double cab pick-ups a specific future concern.

The call comes from RSM, a leading firm of accountants and business advisers, following a First Tier Tribunal, which ruled two Volkswagen Transporter Kombi models were cars, while a Vauxhall Vivaro was classed as a van. Yet, argued the tax experts “most people would struggle to see the difference”.

The call has been supported by Jay Parmar, director of policy and membership at the British vehicle Rental and Leasing Association, who commenting on long-standing benefit-in-kind tax rules applicable to light commercial vehicles, said: “There is a need to modernise some of that antiquated legislation.”

RSM said: “The case provides some useful principles, [but] the picture remains unclear. We would welcome, as a matter of urgency, new guidance as to what HMRC deems to be a car and what is a van. In the meantime, with HMRC guidance contradicting the Tribunal findings, the retrospective collection of tax on these vehicles seems wholly unreasonable.”

RSM says that HMRC had taken a policy decision to challenge the view of employers on some vehicles because the taxable benefit arising on cars was significantly higher than on vans.

Current legislation states that a van must be a goods vehicle, defined as a vehicle of a construction primarily suited for the conveyance of goods or burden.

What’s more HMRC guidance argues:

  • The test is applied at construction
  • A vehicle designed and marketed as a multi-purpose vehicle is unlikely to be a van
  • A vehicle with side windows behind the driver and passenger doors, is unlikely to be a van, particularly if fitted, or capable of being fitted, with additional seating behind the driver’s row irrespective of whether fitted in the vehicle at the time.

HMRC accepts that a double cab pickup with a payload of one tonne or more, excluding its hard top, is a van for benefit-in-kind tax purposes.

However, HMRC has challenged other types of vans with a second row of seats to be cars, despite being classified by the Driver and Vehicle Licensing Agency (DVLA) and insurance companies as designed and constructed for the carriage of goods.

The DVLA classification restricts those vehicles to 60 mph in a 70 mph zone. It therefore, according to RSM, “seems inappropriate for one government department to issue speeding fines as though they are vans and another government department to impose tax penalties as though they are cars”.

Whilst the Tribunal decision was in favour of HMRC regarding the Volkswagen Transporter Kombis, the case detailed salient factors which contradicted those set out in HMRC’s guidance, said RSM.

The tax experts said: “It was found necessary to look at all the characteristics of the entire vehicle as provided to the employee, not just at construction. The side windows were considered irrelevant and being multi-purpose per se does not rule out the van being constructed primarily for the purpose of carrying goods.

“In the case of the Vauxhall Vivaro classified as a van, the over-riding factor seemed to be the significant cargo space available in the middle section, even with the middle seats in place, compared with the Volkswagen Kombi.

“Employers should be mindful when relying on HMRC guidance in determining the taxable benefit arising on a company vehicle, as this may result in unexpected tax bills and possible penalties. The wider consequence of this case could be that double cab pick-ups are brought under review.”

Fleets urged to operate AEB-equipped only vehicles as deaths and injuries on UK roads rise

Fleets managers and company car drivers – as well as private motorists – have been urged to insist on Autonomous Emergency Braking (AEB) being fitted on their next new vehicle, a feature it is claimed could save hundreds of lives and reduce crash injuries on the UK’s roads.

AEB systems – billed by insurance experts as “probably the most significant development in car safety since the seat belt” – take into account traffic conditions to apply a vehicle’s brakes if a driver fails to respond to what is happening on the road thereby avoid an impending crash with another vehicle, pedestrian or cyclist.

A coalition of road safety partners including experts on car and road design, fleet operations, driving for work, driver training and human behaviour has joined forces to press the case to influence a switch to AEB-only vehicles.

Meanwhile, calls to encourage company car drivers to select safety options for their vehicles that reduce the risk of road traffic accidents through tax-related incentives are, it is understood, being considered.

It is widely believed that safety options such as AEB are not selected by drivers because they increase company car benefit-in-kind tax bills. However, it is understood that with HM Treasury officials currently looking to review benefit-in-kind tax rates beyond 2021 “a road safety element could be introduced” that could see such options ignored for tax purposes.

Figures from Thatcham Research, the Motor Insurance Repair Research Centre, suggest that AEB is still not available at all on around half of all new cars on sale in the UK and, chief executive Peter Shaw, says the best-selling models should be setting an example to change that trend.

Thatcham Research has previously singled out for praise the Mercedes C-Class, which has AEB as standard across its range, whilst the Volkswagen Golf and the Nissan Qashqai also had what it called “commendable levels” of standard fitment and optional availability on most other trim levels. However, smaller cars, such as superminis, invariably do not have AEB fitted as standard and often the technology is not available as an option.

Earlier this year Thatcham Research singled out Volkswagen Commercial Vehicles for praise following its decision to fit AEB as standard on all UK vans from June 1. The move made the German brand the first commercial vehicle brand to fit all its vans (Caddy, Transporter and Crafter) with AEB systems (Front Assist with City Emergency Braking).

Not only does AEB have the potential to reduce the number and severity of accidents, it has also been proven to cut third party injury insurance claims by 45%. For fleet operators and van drivers, that can translate into lower costs as well as less downtime thanks to fewer crashes and therefore company cars and vans being kept on the road – and working – for longer. In addition, Thatcham Research suggests that vehicles fitted with AEB have an average insurance premium reduction of 10% compared to those which don’t.

The coalition, which includes organisations such as IAM RoadSmart and the British Vehicle Rental and Leasing Association as well as Thatcham Research, estimates that pedestrian and cyclist-sensing AEB systems could potentially save 1,100 lives and 122,860 casualties in the UK over the next 10 years.

What’s more, Thatcham Research calculates that if more car buyers insisted on AEB systems being fitted to vehicles the technology could deliver an extra saving of 308 fewer deaths and serious injuries by 2025 and save society £138 million.

The AEB call came as government data revealed that the the number of people killed in road traffic collisions last year was 1,792, up 4% since 2015 (1,730) and the highest annual total since 2011. Additionally, 24,101 people were seriously injured last year – a rise of 9% (from 22,144 in 2015) – which was in part attributed by the Department for Transport to changes in the way many police forces reported collision data.

A total of 181,384 people were killed or injured in total on Britain’s roads last year, which was 3% lower than in 2015 (186,189) and the lowest level of record. The overall reduction was against a 12-month 2.2% increase in traffic volumes.

Nevertheless, the rise in the number of people killed and seriously injured on the roads prompted calls from safety campaigners for renewed action to drive down casualty rates including the promotion of best practice in driving for work.

Neil Greig, IAM RoadSmart director of policy and research, said: “Road safety is everyone’s responsibility and it is clear that working in partnership to promote it is the key to returning to long term downward trends. Accelerating the uptake of AEB-equipped cars and promoting best practice in driving for work are just two examples where quick gains could be made.”

Commenting on the demand for fleets, company car drivers and private motorists to ensure future vehicles were equipped with AEB, Sarah Sillars, chief executive officer of IAM RoadSmart, said: “Road safety is a shared responsibility and if individuals and fleets ensure their new cars are fitted with AEB we can all make a contribution to safer roads for vulnerable users now.”

Peter Shaw, CEO of Thatcham Research said: “There’s an urgent need to change the consumer and fleet mind-set around car safety. Especially when AEB can cost as little as £200. Safety should be a deal-breaker, not a nice to have. If it doesn’t have AEB, it shouldn’t be a sale.”

And BVRLA chief executive Gerry Keaney said: “If the combined buying power of fleets and government procurement can be harnessed to adopt AEB it could deliver substantial accident savings very soon.”

FSGB’s partnership approach delivers £100,000 fleet maintenance cost saving to Stannah

Robust management of fleet maintenance costs across the van fleet operated by Stannah has delivered a saving of more than £100,000 despite a 32% increase in the number of vehicles operated.

Stannah, the UK’s leading independent supplier of lift products supplying goods as diverse as loading systems, service lifts, platform lifts, homelifts and stairlifts, outsources the maintenance management of its now 410-strong van fleet to Fleet Service Great Britain (FSGB).

The headline figures, which reflects a pence per mile saving per van of 1.73p – down from 4.51p to 2.78p per mile – a reduction of 38% over a near seven-year period, proves that focused maintenance management can deliver significant operational financial savings on, what is generally perceived to be, a major area of fleet expenditure.

Critical to reducing service, maintenance and repair (SMR) costs and ensuring vans are in tip-top condition has been driver discipline allied to Stannah using a suite of fleet management tools. They include FSGB’s driver app that has a wealth of cutting-edge features notably accident reporting and an SMR job booking facility used by the company.

SMR costs in December 2010 across Andover-headquartered Stannah’s then 310-strong van fleet totalled £341,620. In summer 2017, despite the fleet increasing to 410 vans and total fleet mileage extrapolated over 12 months rising 10% or 787,120 miles to 8.36 million miles the total cost reduced to £232,470 – a saving of £109,150 (32%). That equates to a cost per van per year reduction of 49% from £1,102 to £567.

The vast majority of Stannah’s purchased all-diesel van fleet are Mercedes-Benz Vito and Sprinter and Volkswagen Caddy and Transport models operated over a five-year/120,000-mile replacement cycle with maintenance undertaken on a pay-as-you-go basis.

Martin Carter, Stannah’s group information systems director who is in charge of the fleet, said: “The cost of most products and services increase year-on-year but, remarkably, the pence per mile vehicle operating costs on the Stannah van fleet have reduced since FSGB took over management responsibility.

“Pence per mile is widely recognised as the most accurate measure of a vehicles maintenance expenditure. The fact that pence per mile costs have reduced 38% is very significant.”

In part, it has to be acknowledged, that is due to improved vehicle manufacturer reliability, but it is also a reflection on the overall approach to identify and then manage SMR costs.

During the last two years the age profile of the van fleet has reduced with Mr Carter explaining: “We are adhering much closer to our five-year/120,000-mile policy. We used to let some vans run on, but using FSGB’s data we looked at the pence per mile operating costs over a period of time and it was obvious that above 120,000 miles there was a clear increase in SMR expenditure.”

Furthermore, each Stannah van is allocated to an individual driver who works from home with Mr Carter explaining: “That means every vehicle is completely traceable and it makes a major difference compared with an employee who travels to work each day and collects a van from a depot before returning it at the end of their shift. At Stannah each driver effectively ‘owns’ their van.”

Each vehicle is then equipped with telematics that records and delivers to Mr Carter a raft of data notably relating to driver behaviour and how a vehicle is driven. Additionally, any incident is reviewed in detail with, potentially, driver training the result.

What’s more, with Stannah’s van drivers logged on to the FSGB app it brings a significant element of self-management to the van fleet.

Mr Carter said: “We ask our drivers to provide information and we give them data and they react. The result is that the majority of our drivers do not have crashes and drive sympathetically, which all helps to deliver maintenance cost savings.

“The fleet management tools that we use generate cost reductions through savings in SMR and fuel and a reduced number of crashes.”

FSGB head of sales Marcus Bray said: “FSGB provides Stannah with a comprehensive fleet maintenance management solution and, importantly, ownership of every single service and repair issue is fully managed through to completion. FSGB operates as an extension of Stannah’s own fleet department.

“The maintenance management results are very positive which demonstrates, in my view, a good working partnership and also, very importantly, a Stannah policy which encourages ownership and responsibility from a driver perspective.”

FSGB was launched in spring 2015 led by Mr Bray, who following his decision to leave his former company, Fleet Support Group (FSG), was approached by a number of industry-experienced colleagues to form a unique co-ownership fleet management company

When FSGB launched, Mr Carter decided to invest his trust in the new company’s ability to deliver having previously relied on FSG to manage the Stannah van fleet.