Volvo makes funding less taxing for fleet managers
Volvo has urged fleet managers, and small and medium-sized companies to seek car funding advice from Volvo dealership-based business teams following the launch of its new tax efficient training programme delivered by Hampshire-based BCF Wessex.
So far the in-house corporate sales team has received the specialist training and that is now being rolled out to Volvo UK’s 24 business sales centres in its national dealer network.
Comments Volvo National Corporate Operations Manager Selwyn Cooper: “The tax rules are complicated, and depending on a customer’s personal situation, play a great part in determining whether they would be better off driving a company car or buying the car privately.
Volvo invested in its bespoke car tax training programme to ensure its staff now have the highest level of expertise to help customers make informed decisions and not simply fall into the trap of looking at just the monthly rental figure.”
The corporation tax rules favour lower CO2 emitting vehicles. For example, when a company purchases a sub-111g/km CO2 vehicle, of which Volvo has three – the C30, S40 and V50 in the fuel efficient DRIVe range – it can claim a 100% first year allowance rather than spreading its capital allowances over several years. So, if a small company, that pays tax at 20%, spends £25,000 on such a low emission car, after claiming its first year allowance, the company’s corporation tax charge is reduced by a massive £5,000, which is £4,000 more tax relief than would be available if the company had bought a comparable car with emissions of, say, 111 g/km.
Adds Jeff Whitcombe: “Invariably, when whole life costs are discussed corporation tax is omitted because of its complexity but, actually it can account for a vast boost in cash flow.” Other factors that need to be taken into account include disallowance for leased cars with CO2 emissions exceeding 160 g/km; VAT blockage on company cars available for private use; and tax-free allowances (Approved Mileage Allowance Payments or AMAPs) that an employer can pay a driver using his or her own car for business worth 45p per mile for the first 10,000 business miles and 25p per mile thereafter, as well as being tax deductible for the company. Jeff Whitcombe concluded: “Once all the elements, including running costs and annual road tax, are put in the melting pot, there are a number of Volvo vehicles which prove exceptionally cost effective for both employer and employee.”
· For more on Volvo business sales visit the Volvo UK website.
About the Author: Jeremy Allston is a writer and fan ofbusiness sales.
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