If you read nothing else, read this…
• One of the most obvious ways to cut carbon dioxide (CO2) emissions is to introduce a cap.
• Employers can get a more accurate picture of how efficient a car is by considering costs over its lifetime.
• Driver training can help maximise fuel efficiency and encourage staff to adopt greener driving habits.
Fleet experts have come up with five top tips to help employers cut car emissions and save money, says Nicola Sullivan
The benefits of having an environmentally-friendly company car fleet are many for employers, especially those focused on corporate social responsibility (CSR) and cost efficiency.
But any employer that is planning changes to its fleet to reduce carbon dioxide (CO2) emissions must ensure the end result meets its business requirements.
But how can an employer be sure this is the case? Employee Benefits has asked experts from the fleet industry to come up with five top tips to help employers slash emissions.
1. Introduce a C02 cap
One of the most obvious ways to cut emissions is to introduce a CO2 cap on company cars. From April 2013, the CO2 emissions threshold for the main rate of capital allowances for business cars will be reduced from 160g to 130g per km, as will the threshold above which the lease rental restriction applies. This means the cost of lease is deductible against taxable corporate profits only for vehicles emitting no more than 130g per km.
Julie Jenner, chairman of the Association of Car Fleet Operators (ACFO), says a 5g reduction in CO2 reduces benefit-in-kind tax by 1%, resulting in employer national insurance (NI) savings of about £57 a year on a high-specification diesel car worth £26,500. She adds: “A CO2 cap will not only encourage the use of greener vehicles, it will also help employers meet the taxation changes.”
2. Consider lifetime costs
Employers can get a more accurate picture of a car’s efficiency by considering costs over its lifetime. This takes into account a number factors, including depreciation (the difference between the purchase price and residual value of the car at the end of the lease contract), maintenance and servicing costs, fuel consumption, taxation, vehicle excise duty, and employers’ Class 1A NI contributions, which are based on a manufacturer’s recommended retail price.
3. Ensure car selection meets business needs
Employers should not choose cars based on their CO2 emissions alone. It is also important to consider whether the make and model is value for money and suits the needs of the business and employees.
Nigel Trotman, head of strategic consultancy at Alphabet, says: “There is no point in acquiring electric vehicles if they are not going to suit the business.”
Diesel cars may seem an obvious choice for employers wanting to maximise fuel efficiency, but manufacturing developments that make petrol cars more economical may make them think again. AFCO’s Jenner says: “Are employers getting the value for diesel to warrant paying an extra 10p at the pump?”†
4. Introduce driver training
Employers can maximise fuel efficiency and encourage staff to adopt greener driving habits by providing driver training.
Telematics technology can be used to monitor driving behaviour, flagging up speed and distance travelled. Training can be offered in the form of e-learning, online assessments and on-the-road refresher courses.
The Energy Trust also offers business drivers courses on fuel-efficient driving. Training sessions can be fully funded or subsidised by the Department for Transport.
5. Reduce the need for travel
Employers and staff should identify and eradicate unnecessary journeys. Telephone and video conferencing and internet call services, such as Skype, make it possible to attend external meetings without leaving the office.
Organisations can encourage staff to travel less by incentivising them to reduce business mileage by a certain amount each year.
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