WLTP is firmly on the horizon and looming large. As of 1st September 2018, all new car registrations will need to issue CO2 emission based on WLTP (Worldwide Harmonised Light Vehicle Test Procedure) rather than the previously applied NEDCA.
A few months ago we talked here about the impact WLTP will have on company car fleets, suggesting the following three challenges:
The movement of official CO2 emissions data for a car fleet will impact a company’s carefully constructed fleet CO2 emissions target
Capital allowance claims
It will impact capital allowance claims as cars will move above the new threshold for claiming the standard rate of 18% which, as of the introduction, will be 110 g/km.
In many cases, NEDC2 will effectively move the BiK of a car two brackets higher.
Unless a company has very tight control on their car fleet structure and understands the impact of these changes to a granular level, it is likely that they attempting to manage these impacts by currently observing two possible directives on company car orders:
- as only a selected few manufacturers have released their completed WLTP emissions figures, issue a restricted company car order list, covering only those that are WLTP compliant; severely limiting employee choice.
- allow older models of cars which haven’t been tested for WLTP, whilst anticipating the possibility of a negative impact on BiK tax and employers NI contributions when the actual WLTP figures are released. This could result in a hike in personal taxation and/or a request to cancel the order.
Whilst the above two solutions allow a business to navigate the uncertainty of WLTP, they are not ideal and could cause confusion, employee resentment and cost issues.
To be better placed to deal with the impact of WLTP many businesses employ the services of a Fleet category partner. A fleet category partner operates as client-side support, managing the supply chain and ensuring a helicopter-view of the whole fleet dynamic and the supply chain.
Having a completely transparent overview of the car fleet, with a firm grip on costs, compliance and replacement cycles, means the business can understand the sensitivities of the fleet to external factors such as WLTP, resulting in quick and informed decisions.
So rather than taking a compromised approach to managing WLTP, like the scenarios above, having a detailed understanding of the fleet means strategic decisions can be made that will result in the best possible outcome.
A number of our clients who are dealing with WLTP are using their transparent view of its impact to manage their order procedures accordingly, putting directives in place that enhance the medium and long-term benefit to the employee and the business.
Ultimately, having a fleet category partner allows a faster, better informed and more controlled policy procedure that can react accordingly to extraneous factors such a compliance, taxation and cost increases.