Raising the speed limit – a faster future?

Will a raised speed limit make any difference?
Image Creds: LeasePlan

Earlier this month, former transport minister Philip Hammond announced government plans to raise the upper UK speed limit from 70mph to 80mph. After a period of consultation, the new limit could be introduced as soon as 2013.

But what (if any) impact will this change have upon fleet managers and drivers? The new limit is designed to reduce journey times and, for drivers that cover thousands of business miles each year, any reduction should come as a welcome relief. Despite this, the extent to which this increase in maximum speed will reduce journey times is up for debate; some of Britain’s most congested roads can be at near-standstill for almost 12 hours per day.

Fleet drivers should also consider the cost of driving faster. As highlighted in a previous post, travelling at 80mph uses around 10% more petrol than travelling at 70mph. With petrol prices remaining high, the increased usage could put further strain on already tight budgets.

Despite these concerns, it currently looks likely that this new limit will be introduced. As a result, driver training will become ever more important as business drivers will require the ability to handle both the increased speeds of their own vehicle, whilst compensating for the reaction times and high-speed manoeuvres of those on the roads around them.

Business drivers should be concerned by the demise of the filling station

Are drivers facing increasing rural fuel challenges?

National newspapers have long carried articles about the declining presence of various institutions around the UK, particularly focusing on those that serve rural communities. In years gone by, the Post Office was the most frequent recipient of this concern, with hundreds of column inches being dedicated to the closure of yet another village outlet.

Now, there is another threat to many rural communities. While perhaps they are not seen as central to communities or indeed as emotive, the growing rate of closure for rural petrol stations should be a cause for concern. The number of forecourts in the UK has halved in under 20 years. There are now 11,000 fewer filling stations across the country, and the squeeze is being most acutely felt in rural areas furthest from major thoroughfares.

Petrol station closures are, in part, the result of greater fuel efficiency in modern vehicles – a positive development for business drivers and the environment. Nonetheless, with fuel prices still at exceptionally high levels, the knock on effect of forecourt closures is driving prices even higher in rural communities. Business drivers are also likely to be affected by the closures. They often have to drive in unfamiliar rural areas, where the chance of being caught between stations is becoming ever more acute.

Journey Times Affected

GPS systems have gone some way to alleviate the problem of finding the nearest filling station, but the continuing decline is likely to result in less price competition and lengthy detours to refuel. Fleet managers and business drivers alike should be concerned about the potential additional miles, time and cost this could add to journeys.

It remains to be seen if the government will act on the problem. While there have already been several discussions in parliament about some sort of rural fuel rebate, nothing has yet been agreed and the UK’s crucial network of filling stations is set to shrink further. Maintaining this infrastructure remains important when trying to ensure that business is still practical across the length of the country and to stimulate economic growth outside of major cities.

Local councils should use electric cars

One of Dumfries & Galloway's Nissan Leafs being recharged
Image Creds: D&G Council

They reduce carbon emissions, keep the environment pristine and are also financially viable – what is there to not like about green cars?

Writing in the Guardian, Dumfries & Galloway Council and Automotive Leasing explain how electric vehicles can be a viable option for public sector fleet – if targeted funding schemes are used effectively.

The Council leased four all-electric Nissan Leafs and a sweeper from Automotive Leasing, becoming the first Council in Scotland to add electric vehicles (EVs) to its fleet. Special funding arrangements agreed with Automotive Leasing and Transport Scotland made it possible, allowing the Council to lease EVs at no extra cost and with no additional risk compared to petrol or diesel vehicles.

Tribunal ruling on NICs for business motoring allowances

Image Creds: HMRC

Fleet managers who oversee ‘grey’ fleets on behalf of their employers should be aware of a recent tribunal ruling concerning NICs (National Insurance Contributions) for motoring allowances paid to business drivers.

Employees who are paid this allowance for the use of their private vehicles for business purposes will now need to demonstrate a clear link between the actual business use of the vehicle and any lump sum payments. This is to ensure that any payments for these private ‘grey’ fleet vehicles are classed as “relevant motoring expenditure” (RME) and exempt from NICs.

A key point arising from the tribunal was that an allowance linked directly to the acquisition or ownership of a vehicle would not be sufficient, on its own, to classify the payment as RME.

While this decision is subject to an appeals process, in its current form, the ruling would mean that where the link between the business and the usage of the vehicle cannot be established, the employer will be liable for Class 1 NICs on the motoring allowance payment.

Due to the complexities of managing ‘grey’ fleets, employers may wish to consider taking specialist advice on restructuring their car allowance provisions to ensure future NIC exemptions are secured. As demonstrated by the recent benefit in kind (BiK) taxation changes, this area of business motoring continues to be a focus for the government. Expert support can help businesses take advantage of available benefits, even as the tax regime evolves.

Further information on this tribunal and its wider implications for business car drivers can be found on the HMRC website.