With new rules governing capital allowances set to come into force from the beginning of April, fleet operators are being encouraged to set carbon thresholds on their fleet policies of below 130g/km; helping them avoid a typical £10 per month increase in leasing rates on the average company vehicle. Since the new ruling was announced in last year's Budget, industry experts have been advising fleets of the importance of realigning their carbon ceilings to prepare for the new laws. From April, the threshold for the main rate of capital allowances for fleets reduces from 160g/km to 130g/km, along with the limit for lease rentals. Vehicles with emissions below 130g/km will be able to offset 100 per cent of the lease rental against corporation tax, but for those over 130g/km this amount is restricted to between 15 and 85 per cent. Martin Brown, managing director of Fleet Alliance, said: "The impact of the new rules will, we calculate, add around £10 per month to the lease rental for the average fleet car. But companies can avoid the impact of this rise if they introduce a new fleet policy with a sub 130g/km carbon ceiling ahead of the April deadline. "On a fleet of say 250 cars, a £10 per month increase on a 36 month contract adds up to an additional £72,000, so it's clear that there are genuine cost advantages in re-setting your carbon ceiling to sub 130g/km." With the Government clearly committed to using taxation to reduce carbon emissions, Chancellor George Osborne announced last March that company car tax rates on all cars emitting more than 75g/km of carbon would increase by one per cent in 2014-15 and by two per cent in both 2015-16 and 2016-17. "The tax changes we will see over the next three to four years mean that companies and their drivers need to carefully consider the right combination of factors that best meet their needs. If in any doubt, consult your fleet management advisor," added Brown.
