Cutting costs

Go Green – It Will Save You Money

Small and medium size businesses are often slower than large concerns to tackle green issues. There is often a view that going green will increase costs and cost them money, especially in the short term. When it comes to reducing your company car fleet carbon footprint nothing could be further than the truth.

The Energy Saving Trust (EST) has calculated that if all businesses in the UK together switched to greener company cars, they could save almost £3 billion a year through reduced tax and fuel bills. The Trust also points out a company running 20 vehicles could expect to save almost £20,000 a year by encompassing a range of best practice green measures.

Whether through the addition of low emission vehicles on to the company car fleet or introducing alternatives to vehicle use or encouraging employees to drive in a more eco-friendly manner, there is plenty of cost saving green advice available to small businesses.

Remember, the environmental route is also the commercial route.

The first thing to do is get your drivers on the company side so they understand that going green is in both employees and company interests. Explain to them, they will also benefit through lower benefit-in-kind tax bills. You may use a carrot and stick approach or one or the other, depending upon which industry you are in as to whether recruitment and retention of staff are key. However, it is imperative you communicate with the drivers at all times.

Encourage your drivers to look at ways of reducing their business journeys, by better planning or using the phone or emails instead of a visit. Also encourage the drivers to share journeys if it is feasible. The aim is to use company vehicles less so also look at your fleet and decide if you can manage on a smaller number.

Advise your drivers to drive more eco friendly (smarter and safe driving techniques) as eco-driving can cut fuel use by 15%. See our eco-driving fact sheet on the webcars website

Remember all vehicle-related taxes such as vehicle excise duty, benefit-in-kind tax, and corporation tax as well as Class 1A National Insurance contributions are linked to CO2 emissions. As a result, you should be reviewing your company car list to ensure they offer drivers low emission vehicles.

Additionally, the lower a vehicle’s CO2, the better its fuel consumption. Indeed, even prestige cars with low CO2 emissions can now have a combined MPG over 60, saving substantial amounts in fuel costs.

Other Issues To Be Considered Are:

  1. Consider hybrid vehicles, still a rarity in small businesses but nearly 40% of the larger fleets.
  2. Light commercial vehicles emissions data is now available at www.vca.gov.uk/vandata/vehicles
  3. Stop employees using their own cars on business trips, these grey fleet vehicles typically emit 10% more CO2 than the average company car. Consider instead buying a contract hire car at the end its contract to use as a pool car.
  4. Look at the use of rental cars as an alternative to own vehicle use as well as car sharing.
  5. Withdraw the payment of driver’s private fuel by the company. It is cheaper for both companies and drivers if the drivers pay for their private fuel.

A Plan For Action

  1. Stage 1 – Remove any cars with CO2 more than 160 g/km which will save on fuel, national insurance and benefit in kind taxation. It will also keep out larger 4 x 4′s and sports models
  2. Stage 2 – Adopt a dual approach this time by removing any cars with CO2 more than 140 g/km and with a minimum fuel consumption of 55 mpg (combined). This will save more in tax and fuel costs, although it will restrict your choice since only around a third of cars, invariably the newer models, achieve these standards.

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