Carbon levels fall across Fleet Alliance fleet
July 2012


The tax changes announced in March’s Budget are accelerating the speed at which companies switch to green, low carbon emitting vehicles, says Fleet Alliance which has seen carbon emissions fall to an all-time low on its managed fleet.

For the first six months of this year, some 66% of all new cars ordered by Fleet Alliance customers had carbon emissions below 140g/km, compared with 62% for the same period last year, while some 44% of new cars ordered in the same period had emissions of less than 120g/km compared with just 29% a year ago.

As a result, around 59% of the managed fleet of more than 10,000 vehicles now has carbon emissions of less than 140g/km, with 32% of them below 120g/km.

Martin Brown, managing director of Fleet Alliance, said: “We have been advising clients to order cars with CO2 levels as low as possible for some time, as well as looking at the potential for client inclusion of a special ‘green’ variant for each grade of the car policy, such as hybrids or low carbon models.

“Drivers are selecting lower emission vehicles because of the lower BIK bills, while companies are keen to promote greener vehicles to their staff as they mean lower tax charges for them, too.

“At the same time, manufacturers are introducing far more choice in the sub 140 and sub 120g/km categories and this is a trend that will only increase over time,” he said.

“The message that lower CO2 equals lower costs, lower fuel consumption and lower taxes is definitely getting across and we have pushed it very hard with our clients. By making the right vehicle choices now, fleet decision makers can make cost savings running into several thousand pounds over the typical three year life of a vehicle.

“Without taking a holistic approach to vehicle selection, however, it is easy to make the wrong decisions. That’s why using methodology such as whole life costs to inform selection is essential in getting vehicle choice right now - and going forward,” he said.

Fleet Alliance’s advice to clients has been based around the long-held belief, since confirmed by the Budget, that the Government is committed to using taxation to reduce emissions. Any policy decision taken by fleets today will impact on company costs and driver taxation for several years to come.

In the Budget, Chancellor George Osborne revealed that company car tax rates on all cars emitting more than 75g/km of carbon would increase by 1% in 2014–15, and by 2% in both 2015–16 and 2016–17, on top of a rise of 1% in 2012-13 – a total rise of 6% in four years.

In addition, from April next year, the CO2 emissions threshold for the main rate of capital allowances for business cars will reduce from 160g/km to 130g/km, and the threshold above which the lease rental restriction applied would also reduce from 160g/km to 130g/km.

The tax changes underline the importance of setting fleet policies that encourage take-up of low-emitting cars to capitalise on savings in tax, National Insurance and fuel costs.

Martin Brown added: “The tax changes we will see over the next three to four years mean that companies and drivers need to carefully consider the right combination of factors that best meet their needs. If in any doubt, consult your fleet management advisor.”

For more information regarding the impact of the tax changes, or for details of any of our products or services, please contact Fleet Alliance on 0845 601 8407 or email info@fleetalliance.co.uk