Car leasing customers and business owners have called for more notice on policy changes that could play a part in their future agreements and finances.
The changes to Benefit In Kind (BIK) Tax has found criticism from both industry watchdogs and firms who use vehicle leasing to help benefit their business.
Previously any changes to taxation would first serve a three year notice period before coming into force but this change was already in force by April (2011).
The new policy will have massive implications on the decisions that firms make regarding their individual vehicle or fleet lease an industry insider said: “ An example would be an employee choosing their company car today and not actually knowing what contribution they will be making, there’s no clarity at all to what future tax bills could be.”
Benefit In Kind tax is a PAYE contribution that is taken for an employees use of a company car outside of the working requirements.
The amendments that came into force in April included the abolition of reductions for alternative fuel and a restructuring of the emissions allowances.
Analysts believe that this could then result in many firms who use vehicle leasing and contract hire withholding company vehicle renewals or shortening their leasing agreements/contracts which will cost firms more money but could offer assurance in the long run.
Hopefully this shouldn’t have too much of an impact on the sector as company leasing has become more and more popular in recent years, from vans to executive saloons there has been a realisation that that you can make a good impression to a client, save money on tax and VAT without having to pay out the high forecourt prices.
A member of the family once rang me convinced she had seen the very car she had written off 9 months earlier. She had been given full payout of trade value for the vehicle and as the car looked a total wreck assumed it was going straight to the crusher at some breakers yard. This is what happens with many cars when they are so badly damaged that they must by law be broken for parts or go to the crusher. These cars are categorised either as Cat B or A, meaning no matter what they cannot be prepared and put back on the road, although with Cat b cars, a registered breaker can break this car down and sell its parts.
However cars that are categorised at Cat C, D or X cam be put back on the road, albeit Cat C’s need a special mot inspection first. These vehicles are sold off through salvage auction yards throughout the UK, most with online options. In theory salvage with deemed as Cat C or B, should not be economical to repair, but insurance companies have to take into account professional labour costs and replacing like for like, so there are many who believe they can buy these salvage cars, repair them and put them back on the road, either for themselves or as a business.
Clearly this what occurred with the member of family, the car was deemed as too expensive to repair, but was inspected by the insurance company who deem it to be within a Cat band that would put the car into a salvage auction available to anyone wanting to buy and repair it. Actually it is surprising how many insurance salvage auctions there are up and down the country and the availability of cars within. This process does help with insurance premiums, as there is some return on the crashed vehicle that will go into the calculation of your claim. With many classic car insurance policies owners as given the chance of receiving less in an insurance payout, but receive the car back, so they can restore it themselves. You occasionally also find classic salvage projects at these auction too.
Back in July 2008 the good old Which magazine did a review and report on the breakdown services and as a review site, with your opinions important to us, it makes sense to share some of those from the Which League.
The clear winner was the AA with an impressive overall score of 78%, the worst performer from the 8 companies listed was Europe Assist with only 50%.
Now we are not going to list the full report as you can read it direct here at Which breakdown services league, but we do want to comment on a few things.
The first thing that comes to mind is the difference between the Green Flag score of 59% and the Direct Line score of 69%. As both these organisations are owned by the Royal Bank of Scotland, as far as we know, the Direct Line breakdown cover polices are in fact delivered by the Green Flag service. Tell us if we are wrong here!
So it is strange that there be such a difference in scores. However one reason could be the variation of breakdown cover agents that deliver the call outs. They are not employed by these companies, just follow by their rules, so there may be a message of inconsistency here.
The final issue is the noticeable absence of other companies such as Britannia Rescue, Autonational, Gem Motoring Assist , Breakdown Direct, Rescue My Car and probably a few others we could mention. If they were part of the report, why we do not see any mention of them, to give a clearer view, especially as at least one of these has awards from national magazines for their breakdown cover services so the members of the public must be using these companies.
Anyway, for now read the information from Which as it is the most comprehensive we have.
Trying to find the right Christmas present for the person who has everything can be a nightmare at the best of times, but now during the financially hard hitting times, there are those who could do a few practical gifts this Christmas.
One solution could be to buy breakdown cover as a gift, either for someone who doesn’t think they need it, or maybe someone who may just not renew their current policy due to money problems. The breakdown cover organisations have never really been that good at marketing the fact that you can buy a breakdown cover policy for someone else and it is not until you visit their websites as an afterthought, which you can find out, that in most cases you can.
The AA, has just put a small banner on their homepage leading to the gift membership page, which pretty much explains it all. There is some considerations though, before you go to the AA Breakdown Cover site credit card in hand, thinking you have solved a gift problem. You will need to spend a bit of time establishing, if the policy you will buy for that person will suit their needs. No point in buying a breakdown cover policy, thinking it covers that car and only covers the driver, or maybe buying a roadside assistance option, when they do a lot of mileage away for home and really need a policy that will get their car and themselves home, should they breakdown.
At the time of writing the gift breakdown cover options start from ?39, which is a bit more that if you were to buy the cheap breakdown cover option yourself, so we must assume, there is some sort of gift package, card that comes with it. I suppose it could be an administration charge also.
According to The Mail on Sunday, Britain’s motorists will have to pay a new green tax. This will greatly increase the price of gas and also add to the costs of purchasing a new car by thousands of pounds.
The EU and Government already have in place a “pay-as-you-pollute” plan. To this they will be adding a carbon charge. The goal is to help the country reduce the amount of carbon dioxide, which is greatly caused by cars and lorries. A Department of Transport report says that this new tax could be in place by 2013. It may even combine with other forms of intervention such as fuel duty.
The ultimate goal is to have motorists change the way in which they drive. Hopefully this will cause them to drive less and more carefully therefore reducing fuel. Hopefully they will also begin to buy cleaner cars. (more…)
In a report lately released in The Herald on the 21st of May, states there are signs that insurance for young drivers is set to soar. The report predicted that car insurance premiums are all set to rise over £3000 within the next 10 years for young aged drivers.
Due to the high increase in the number of collisions young drivers are involved in are between 17 and 21 year olds, have made the insurers to have an increase in the car insurance premiums of up to 92% in the last ten year, and this trends is seemingly likely to continue for the next ten years.
The overall average insurance for drivers between 17 and 21 is currently £984 whereas for someone older than 21 the average shoots down to approximately £409, and in the case of just young men in the 17 to 21 range, are been charged £1181. (more…)