A company vehicle is more than just a means of getting from A to B. It can also be a great motivator and a way of promoting the business and its values to employees and customers.
There are generally good tax benefits and savings to be had. Talk to your accountant to make sure you set up your business vehicle scheme in the most tax efficient manner for the type of business you are in. The main issue is whether you also use the vehicle for personal use. For example: it’s easy to make the case that large delivery vans are solely for business use than it is for a car that you use as a management consultant or cleaner.
Regardless of what type or size of business you are in, there are also some general opportunities to make savings from your business vehicles. Here are a few ideas:
1. Save on insurance with a dash cam
The dashboard camera, or dash cam, is a small camera that is fixed to the front or back of your vehicle. They can be hard wired or powered by the cigarette lighter. The camera records on a continuous loop. The advantage of having a dash cam is that if you have an accident or your vehicle is vandalised, the dash cam can provide important evidence of who is at fault. The cost of those devices is minimal – around £30 – and most users not only believe that they will help with disputes, but also that they drive more safely as a result of having the camera. What’s more some insurance company now offer lower premiums if you have dash cams fitted.
2. Fuel cards
A business fuel card can enable you to access discounted rates for fuel. Cards will also help you to manage cashflow and tap into data on how to manage better fuel efficiency. Fuel cards are essentially specialised credit cards restricted to fuel and related products, with a range of information and support to help you manage vehicles and fuel better. They are ideal for any business with a fleet and can also benefit businesses with just one vehicle. To find the best fuel card for your business see iCompario.
3. Branded vehicles
Having branding on your vehicle is a classic way to maximise your assets. There will be an upfront price for the design and the vehicle wrap; the saving is to your marketing budget. Think of the value of a mobile billboard, where you don’t need to pay for the board and you can turn-up right under your customer’s nose. Of course you need to remember to keep the vehicle clean and presentable at all times and to make sure that whoever is driving is a courteous and considerate motorist.
4. Lease rather than buy
Leasing can be an attractive option for your business cash flow. Rather than paying out a large lump sum, you will have manageable monthly payments. There are business leasing deals not available to private purchasers. You can also claim back 50- 100% of VAT if the vehicle is used wholly for business purposes.
5. Electric vehicles
Electric vehicles (EVs) already benefit from a zero rate of road tax, and fuel cost savings of 80-90% – saving your business a considerable amount each year. From 2020, the government is seeking to further increase the take up of company EVs with reductions in the level of new Benefit-In-Kind (BIK) tax rates, which will drop from 16% to zero for drivers of EVs. Those new rates come into play from April 2020.
If your business has an environmental or ethical focus, then an EV will also bolster the brand and show your customers that you put your money where your mouth is.
Ultimately, the type of vehicle deals and savings that you opt for will be driven by the needs of the business. Whatever line of business you are in, when it comes to investing in a vehicle or a fleet, make sure that commercial needs and values are aligned. Then do your research and make sure that you are benefiting from all the potential savings out there.