HRUX – Our Stories
HRUX produces articles and reports on a number of issues and these can all be found here.
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Should you delay replacing company cars because of the new tax rules?
Should you delay replacing company cars because of the new tax rules?
The answer is “it depends”, but based on our sums for the limited number of cars where WLTP CO2 is published – probably not.
There are basically three factors:
1. RDE2 (for diesels) which is mandatory from January 2020 for brand new models and January 2021 for all new registrations.
2. The 2% reduction for cars registered on or after 6 April 2020.
3. The uplift for WLTP (broadly 1% of scale charge for each 5g/km of extra CO2).
With the RDE2 switch saving 4% the total saving could be 6% for 2020/21 which means that CO2 overall needs to rise by less than 30g/km to make a 2020/21 diesel car cheaper than a 2019/20 car (just 2%/10g for a petrol). Early indications are that, overall, taxes will be about the same across the board, but of course this will vary by car.
For a £25k RDE2 compliant diesel, with a WLTP increase of 15g/km, the overall difference is a reduction of 3% (see the graphic) which means tax savings of £25 a month for a 40% taxpayer. So, for arguably a “best case scenario”, the driver only saves £25 a month for one year. Is that enough to justify waiting longer for the car? Only you will know for your fleet.
PREVIOUS POSTS
Should you delay replacing company cars because of the new tax rules?
Should you delay replacing company cars because of the new tax rules? The answer is “it depends”, but based on our sums for the limited number of cars where WLTP CO2 is published - probably not. There are basically three factors: 1. RDE2 (for diesels) which is...
New company car tax rules
There was an understandable degree of excitement when HMG announced the new company car tax rules yesterday. However, arguably the changes amount to little more than moving the deck chairs. We believe the biggest news is that the CO2 scale charge escalator has finally...
P11D Correct Data
HMRC have published today the P11D (corrected) data up to 2016/17 and provisionally for 2017/18. As usual we've updated our slide for you and this is below. The key to note is that the total number of company cars fell from 940k in 2016/17 to 890k in 2017/18, but the...
ICFM Annual Conference
It was a huge pleasure and my privilege to address the #ICFM Annual Conference in Wembley on Tuesday this week. Slightly depressing subject though - company car tax. The two speakers before me talked all things green. I was struck that our company car system really...
Anabella and Brenda
I want to talk about two company car tax drivers, let’s call them Anabella and Brenda. It's April 2020. Anabella works in London for a PE house – she’s got a Porsche Taycan, List Price £120,000. She only does 8,000 miles a year, all private, mostly to the station in...
New PHEVs are coming
Apparently a 34% fall in PHEV sales is the fault of HMG’s decision to remove the grant? I have to say I think that’s unlikely to be the full story? This time last year there were a number of decent PHEVs available – the Golf and Passat GTE, Audi A3 etron, BMW 330e,...
Yes the future IS electric
It appears around a million Europeans bought petrol cars rather than diesels in 2018. HRUX’s own sums suggest that, over their lifetimes, those cars will emit nearly 3 million tonnes or more CO2 than the diesels Europeans were buying. Is that a lot? Does that matter?...
A Real Conversation with a Mini Dealer
“So what’s the electric only range on the PHEV?” “There’s no electric mini yet. We only have the Countryman which is a hybrid; like the big one over there in the corner” “Cool, but what’s the electric only range on it?” “We only have the Countryman with an electric...
Company Car Tax 2019
I’m reviewing a car fleet for a client – and I’m looking at a Jaguar XE 2.0d where the CO2 has increased from 99g under NEDC to a new figure of 128. I've checked it twice – and that’s the movement – 29g/km. The company car tax for 2018/19 will now be based on 6% more...
Fleet Review Process
30,000 business miles a year - which makes more sense: Skoda Superb Estate or a Nissan Navara pick-up? No I’ve not driven either. And yes, I too fancy the full size “Tonka Toy” Navara. BUT 30,000 miles a year in a pick-up?! I’ve just completed a fleet review for a...
The Impact of WLTP
Good to see government is still working, and not all on Brexit! Evidence being sought to help the review of vehicle taxes and the impact of WLTP in advance of the Spring update. Deadline of 17 Feb 2019 for any contributions. https://lnkd.in/gRT6ysN
Total Tax and NI Take on Private Fuel
Been writing for a while now on my frustrations with high company car taxes. But why are they so high? Is HMG being very clever or extremely foolish? Interesting to look at taxes on private fuel in a company car - here’s one the Government did earlier.... The graph...
Alternative approach to presenting DB scheme funding results
Prudence in pension scheme funding can provide cover for downside scenarios and, in those situations, to not be reliant upon the sponsoring employer to make up any shortfall. In that regard the introduction of the Scheme Specific Funding Regime in 2005, where trustees...
HMRC tax take from company cars
Having spent some time at the Fleet Management Live show over the last 2 days and seen the focus on electric vehicles I was wondering on the impact that the new tax rules would have? The Government currently receives ~£2bn p.a. in company car tax and Class1A NIC. This...
Productivity Growth has Fallen Short of QBR Forecast
The news today that the Office for Budget Responsibility has persistently over-estimated Britain's productivity over the past seven years highlights the dangers of producing financial forecasts - emphasised by the disparity between the projections and the eventual...
Can I Let You Into a Little Secret?
Can I let you into a little secret? Most of the LinkedIn posts I write get rejected by my partners for being too ranty! I know! Me? Ranty?! It may not surprise you therefore to hear that I’ve had a couple of potential posts rejected these last couple of days about the...
The Latest Statistics from Expenses and Benefits
The latest statistics from Expenses and Benefits have been produced (link in the comments section). Interesting to note: • These relate to the tax year 2016/17 when most companies are currently submitting their 2017/18 P11Ds – almost a year to produce these...
UK Gov gets blood from stone!
UK Gov gets blood from stone! The graph shows the total tax and NIC take from private fuel scale charge compared to the number of employees “enjoying” the benefit (the red line). The Exchequer has kept the tax and NIC above £300m per annum whilst the total number of...
Biggest P11D concerns for 2017/18
Some 3.8 million individuals are expected to receive at least one P11D reportable taxable benefit in 2016/17; equating to over £3bn and £1.2bn in tax and NIC respectively. We’ve asked our clients what their biggest concerns were for the coming 2017/18 season. In...
FIVE Facts About P11Ds
Tax and employee benefits; FIVE things you might not have known! At £250bn (2015/26) PAYE represents approx. 50% of the UK’s total tax take, and its climbing. £3.9bn of this comes from forms P11D (up 5% on 2014/15). For comparison Inheritance Tax was only £5.1bn. So...
OMG Another Post Around P11D
OMG another post around P11D - anyone would think we’ve a product to sell! 🙂 I know, I know, it’s like crime in a multi storey car park - wrong on so many levels... See the graph? It shows the total tax and NIC on company cars collected via P11d over a nine year...