26 June 2017

Activa Contracts adds a cash or car calculator to its industry-leading ‘Tax Guide for Fleets’ app

Activa Contracts has enhanced its industry-leading ‘Tax Guide for Fleets’ app with a data-driven tax calculator. This allows users to calculate if a cash alternative offered by their employer will increase their tax bill.

The ‘Tax Guide for Fleets 2017/2018’ has been updated to reflect recent spring budget tax announcements, including reforms to car salary sacrifice and car or cash allowance tax rules.

Developed in partnership with leading automotive industry consultancy and tax experts BCF Wessex, the app provides up to the minute details of every aspect of corporate and personal tax relating to company cars. This will help users to access specific information whenever they choose.

What’s more, unlike paper-based data sources, it will never be out of date, as any tax changes are incorporated within hours of being announced.

Our recently launched web-based company car or cash allowance calculator puts all your information in one place and makes it easy to access your tax and fleet information. The simple to use, highly visual and quick to calculate ‘business car toolkit’ was developed in partnership with BCF Wessex and builds on its award-winning business car software, Gensen.

The new car salary sacrifice and car or cash allowance rules are known as Optional Remuneration Arrangements (OpRA). This essentially means that employees opting for a salary sacrifice arrangement (or who are taking a company car in lieu of a cash alternative) will pay tax on the higher of the existing company car benefit value – and the salary sacrificed or cash allowance given up.

However, car arrangements in place before 6th April 2017 are protected until April 2021 and ultra-low emission vehicles - currently those with CO2 emissions of 75g/km or less - are exempt from the regulation.

To highlight the benefits of company cars (specifically ultra-low emission vehicles) Activa Contracts also continues to hold client roadshows, where salary sacrifice and cash or car allowances are a major discussion topic.

Activa Contracts Sales and Marketing Director Lisa Temperton said: ‘Employees driving their own cars on business trips continue to prove to be an administrative and compliance burden for many employers. We believe a company car remains exceptional value for money for both employers and employees and limits organisations’ risk exposure. Our enhanced app is a key tool in proving the case and helping employees make the cash or car decision with all the critical information at their fingertips. It further adds to Activa Contracts’ industry-leading position as provider of a range of tools to enable clients to make fully-informed decisions.’

Not only does the ‘Tax Guide for Fleets’ app use an extensive database of around 9000 vehicles, which identifies cars by make/model/fuel type/transmission - it critically incorporates the new OpRA calculation, enabling users to find out if the cash alternative offered by their employer would increase their tax burden.

BCF Wessex director Jeff Whitcombe said: ‘A huge number of company car drivers are offered a cash allowance as an alternative to a company car. The new way that Benefit-in-Kind tax is calculated may give them a financial headache if they don’t consider the effect that cash alternatives now have on the cash or car decision. We believe we are the first to introduce this particular functionality to a benefit-in-kind tax calculator.’

The updated ‘Tax Guide for Fleets 2017/2018’ tool includes:

  • All tax relevant tables including
  • Income tax rates/personal allowances
  • National Insurance rates and thresholds
  • Corporate tax rates
  • Capital allowances and lease rental restriction information
  • Car and van BiK tax rates
  • Car and van fuel benefit charge rates
  • Information on plug-in car and van grants
  • Approved mileage allowance payment rates and advisory fuel rates
  • Vehicle Excise Duty rates and VAT information (including VAT on private fuel rates)
  • A summary of the 2017 spring Budget as it impacts on the fleet industry and company car and van drivers
  • A glossary of terms used when discussing company cars and vans

Ms Temperton concluded: ‘Activa Contracts prides itself on offering professional fleet policy advice using sophisticated financial modelling software that takes account of current and future tax legislation. The app ensures that all our customers - fleet decision-makers and company car drivers - can access the very latest tax information on the move.’

Access Activa Contracts’ ‘Tax Guide for Fleets 2017/2018’ app on any smartphone.