Contract Hire Specialist

Our Mythical Bushwalker reaches a yawning gap between his current standpoint and his destination.

A huge abyss stares up at him mockingly.

All that connects him to the pot of gold on the other side is a flimsy, tattered and weather beaten rope bridge.

“Almighty god” he cries out heavenward, “if I make it to other side in one piece – I promise that 80% of my fortune will be donated to charity”. Having placed his trust in a Higher Power, our bushwalker cautiously places one foot on bridge.

When he is a quarter of the way through he turns heavenward and says “Almighty god, if I make it through to other side – I promise that 50% of my fortune will be donated to charity”.

When he finds himself halfway through to other side he turns heavenward and says “Almighty god, if I make it through to other side – I promise that 30% of my fortune will be donated to charity”.

When he finally makes it across to other side in one piece and none the worse for his exploits he turns heavenward and says “Almighty god – I was joking and you thought I was serious!”

 Lest you think that this little quip is nothing more than the ranting of a bored soul, you may wish to think again.

Our eagle-eyed Chancellor of the Exchequer in his latest Pre-Budget Report slashed by 50% the Carbon Tax payable on cars with an emission of 72 co2.

At first glance this looks and feels like a real savings – 50% tax cut on low emission vehicles. Heck, Santa Claus must have come in early this year.

The catch is, are you ready for this one? – there is no such car in existence in the UK with this level of co2 output.

The lowest level of co2 output is the Smart car diesel coupe with an output of 89 co2.

“My dear suckers – I mean tax payers – when I said that the Almighty squatters of Her Majesty’s Government would cut your taxes we were joking. And you thought we were serious”.

First off, let me say a huge THANK YOU to all of you who have taken the time to share your feedback with me – you can’t imagine how much it means to me to have the blogging acknowledged.

Please also share with me what you would like to see posted here, what topics should be covered in the future, with regards to contract hire, leasing, motor insurance etc.

 End of Quarter 1 is just around the corner (!) so not a bad time to reflect on some big and small changes that have occurred since the start of the year with regards to financing and leasing a vehicle.

 There have been many, and most have been ignored by our media.

 The biggie was the VAT ‘reset’ to 17.5% at the start of 2010 from the previously 15% enjoyed by all consumers.

I don’t know about you, but I prefer to keep more of my hard earned dosh in my pocket. VAT increase has an immediate affect on everything. First and foremost – fuel costs go up. Our current economy (and for the foreseeable future despite Al Gore and honchos) is based on fossil fuels and any tinkering with VAT impacts fuel prices.

Fuel prices in turn have an impact on every single thing which forms part of our daily life, food, clothes, electricity, water – you name it. Technically food may not be vatable, but the transport of food certainly is. And who do you think gets saddled with the extra costs?

 Not surprisingly, the VAT increase also affected the price on cars; let me explain.

Every vehicle has a VAT element as part of the On The Road price. (OTR is an acronym we can leave aside for now and which will be covered at a subsequent blog.)

When VAT is tinkered with, it immediately changes the ‘bottom line’ price of the car. Even businesses who can claim back some – or all – of the VAT outgoings on their lease are also affected by this increase. The VAT that is reclaimable is only on the monthly lease but the car price increase will push up the monthly rentals.

If you think this VAT ‘reset’ is the last we’ve heard – you have got something else coming. Many experts believe that a further VAT increase is imminent. Never mind that we are already overtaxed and spend about 6 month of the year working to enable our elected representatives to spend to their hearts’ content, VAT rates will likely again be tinkered with.

Mind you, the recent “scrapage scheme” where older cars where traded in for new one’s gave HMRC a boost as it brought in more money in VAT then it ‘spent’ on the scheme – but that is besides the point.

While the rest of us spent the new year raising our wine glasses in hopes for a better future, some of spent it by raising the Vodka And Tonic (he,he,he…).