Paul-Hollick-tn

ICFM TO TACKLE FLEET DECISION-MAKER CHALLENGES POSED BY INTRODUCTION OF WLTP AT MASTERCLASS

Posted On : 12th Sep, 2018

Fleet uncertainty has been ramped up by the introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP), the all-new vehicle emission and MPG testing protocol.

But the ICFM, the organisation dedicated to to advancing the profession of car and light commercial fleet management through training and qualifications, will provide insight into the actions fleet decision-makers should be taking with a WLTP Masterclass.

The 60-minute Masterclass, which is free to attend, will be held on Wednesday, October 10, 2018 from noon-1pm at the NEC, Birmingham. ICFM members and non-members can book a place at the Masterclass by emailing the ICFM hub at administration@icfm.com.

The Masterclass, the latest in a series of similar workshops hosted by ICFM tackling key industry issues, will be led by the organisation’s chairman Paul Hollick.

He said: “The arrival of WLTP is presenting huge challenges to fleet decision-makers. At the Masterclass myself and industry experts will highlight the practical implications of WLTP on company car choice lists and taxation and provide advice on what actions should be taken.

“The challenges posed by the introduction of WLTP maybe unprecedented, but they also provide opportunities to fleet decision-makers to review existing company car choice lists and their whole modus operandi. To put operations on ‘hold’ and wait for further announcements by government and manufacturers is to effectively go backwards.

“It is imperative that, at the very least, fleet decision-makers keep company car drivers informed as to exactly what is happening with the introduction of WLTP, regularly review vehicle choice lists and keep firmly abreast of manufacturers’ data and new model introduction timetables.”

WLTP protocols were introduced for all new car and lighter van models (Class I up to 1305kgs) on September 1 last year and for all cars and lighter vans (Class I up to 1305kgs) from September 1 this year. New types of heavier vans (N1 Class II 1305-1760kgs and III above 1760kgs) have had to be tested under WLTP rules from September 1 this year and all heavier vans (N1 Class II 1305-1760kgs and III above 1760kgs) must be tested under WLTP rules from September 2019.

Claimed to be more representative of ‘real-world’ driving than the outdated New European Driving Cycle (NEDC) vehicle testing procedure it replaces, WLTP has been billed as “the world’s toughest-ever emissions standard”.

However, businesses and company car drivers face potentially the biggest shake-up in vehicle decision-making since the 2002 introduction of a benefit-in-kind tax system based on vehicle carbon dioxide (CO2) emissions.

All motoring-related taxes have a CO2 base – Vehicle Excise Duty and capital allowances as well as company car benefit-in-kind tax, which also triggers employer Class 1A National Insurance contributions – and while that is not going to change, the arrival of WLTP is viewed by many experts as having a “seismic” impact on fleet operations.

The UK government has said that it will introduce a motoring tax system based on WLTP CO2 values in April 2020 with an announcement anticipated in the autumn 2018 Budget. Until then the current system remains in place.

During the current ‘transitional period’ vehicles tested to WLTP protocols then see the resulting figures ‘converted’ into a so-called NEDC-correlated value using a European Commission-produced mathematical tool.

It had been anticipated by the motor industry that NEDC-correlated figures would be tax neutral, but the reality has proved to be somewhat different. Autovista Group, data providers to vehicle manufacturers, leasing companies and other organisations, has calculated increases in CO2 from NEDC to WLTP of 4%-34% depending on vehicle in relation to data published to date. Fuel economy is lower, but with it claimed to be more reflective of ‘real-world’ driving fuel bills, taken at face value, are unlikely to be much, if any different from previously.

Vehicle manufacturers have responded to the changed world caused by WLTP by managing the negative impact of CO2 emissions with a range of actions that include:

  • The withdrawal of specific engines or engine and option configurations
  • The re-engineering of vehicles to improve emissions and MPG causing the interruption of model production
  • Simplification of complex ranges.

Additionally, many models in manufacturers’ line-ups have yet to go through WLTP homologation so cannot be sold. That has prompted some leasing companies to remove them from their quoting platforms.

All that has left fleet decision-makers and company car drivers completely in the dark. As a result, some organisations have put vehicle replacement programmes on hold until the government confirms its taxation plans post-2020. Meanwhile some employees due to change their company car are opting to take a cash alternative instead fearful of facing a significant future tax rise, while new employees to a business and entitled to a company car as part of their remuneration package are opting for cash for similar reasons fearful that the benefit-in-kind tax burden will be too great.

JOIN THE ICFM

We are keen to encourage professional development of fleet management skills at all levels. Find out how joining the ICFM can benefit you.

UPGRADE MEMBERSHIP LEVEL

Please login to the Members Area and complete the form to upgrade to Member or Fellow.

Did you know that you may be able to claim tax relief on your ICFM Membership?
If you are a UK tax payer