Strategic Finance
Finance directors urged to save on NICs through better fleet management |
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| Strategic Finance | |
| Written by Roberta Murray | |
| Tuesday, 16 March 2010 | |
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New survey highlights hidden savings potential.
A new survey of UK Financial Directors highlights significant cost-savings for businesses who recognise the impact of vehicle CO2 emissions on National Insurance contributions. The figure falls to 10% of respondents who manage a fleet of 21-40 vehicles. Employers can reap significant annual cost savings by making simple adjustments to fleet policy, by introducing a choice of lower emitting vehicles and highlighting the financial savings to the employee of choosing a greener vehicle. With the recent increase in emissions-based taxation, the Consultancy Services team of Lex Autolease has seen a marked increase in the numbers of UK businesses of all sizes requesting advice and help in implementing and changing fleet policy to deliver cost savings and a greener fleet. Class 1A NIC’s are calculated by multiplying the P11d list price of the vehicle by the HMRC’s benefit in kind tax percentage rates which are derived from the vehicle’s CO2 emission levels. The employer pays National Insurance Contributions on this amount at 12.8%. Vehicles that produce low CO2 emissions, deliver less of a tax burden and hence lower employer class 1A N.I. contributions. 33% of those surveyed felt that they could realistically reduce their fleet costs by between 6% and 10%. However, without understanding the full impact of emissions on all aspects of business costs, and how it can positively benefit the bottom line, this target looks unrealis Commenting on the results of the survey, Nigel Stead, Managing Director of Lex Autolease said: “UK businesses are striving to cut costs, and companies operating fleets of vehicles have a number of opportunities to implement cost saving measures, provided they have the expertise and knowledge to introduce change. We’re working with our customers to help draw out these opportunities, and implementing cost saving measures based on CO2 emissions, not only delivers substantial annual cost savings to employers, but also the employee.”
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