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Toomey Opticar Limited is a wholly owned subsidiary
of Laindon Holdings Limited, and a member of the
Toomey Group. The company provides online
driver management systems as part of an overall
fleet strategy that in most cases will include
a combination of company owned and employee owned
cars. The Toomey Group, one of the country’s
largest independently owned contract hire companies
is well positioned to competitively source, finance
and maintain your fleet be it company or employee
owned.
The Toomey Opticar application, Optifleet
has been designed to dynamically assign employees
to the least-cost selection – company car
or employee owned car – based on the specific
individual mileage profile.
Once implemented the scheme requires no company
involvement, the system manages every aspect of
a driver’s experience, including car selection,
online mileage logging, Occupational Road Risk
controls, maintenance, insurances and accident
management.
Optifleet is the solution for companies
wishing to reduce fleet costs and add value to
the car benefit in a properly managed environment.
The key to the scheme is the balance between company
owned cars and company funded employee owned cars.
This document focuses on the employee owned aspects
of the scheme although it is important to realise
the online management covers all cars in respect
of fleet management and mileage reporting.
Optifleet Scheme
Objectives
• Savings
One of the key objectives is to generate savings
for the company, or at least enhance the value
of the car benefit at no additional cost. This
is mainly achieved by steering employees towards
their least-cost option at the point of selection,
with a combination of company owned and employee
owned options. The employee owned option is addressed
by means of a net cash allowance using the Inland
Revenue Authorised Mileage Allowance Payments
(AMAPs) as a major component of the monthly compensation
to employees.
Where employee's business mileage
falls below the calculated break-even point, they
will find that the company car is their most cost
effective route, with higher business mileages
achieving some significant savings for both company
and employee.
• Enhanced Car
Benefit
An enhanced car benefit to help with recruitment
and retention is another key scheme objective.
The setting of employee budgets is a key part
of the scheme and if the savings realised by the
scheme can be shared with employees by increasing
their budgets, then the result will be extremely
positive for both parties.
Employees will not only realise that they have
been protected from increased taxation, they will
also have the opportunity to either make further
savings themselves, or have a better car for the
same net monthly cost. This is an area that is
often overlooked when new car benefit policies
are planned, it is the key to successful implementation,
and is highly visible to employees accessing the
car selection section of their online accounts.
• Freedom of Choice
In many organisations the choice of company car
is restricted for reasons of cost or hierarchical
structure. With the Optifleet scheme employees
can choose whatever car most suits their lifestyle
and pocket.
Employees can choose to take a company car or
an employee owned car with full knowledge of the
relative costs.
• Flexibility
The scheme provides a considerable degree of flexibility
both in car selection and management of the scheme.
When setting budgets the normal company
replacement cycle and profile is used, and this
cycle becomes the default period in the employees’
car selection section of their online account.
They can, however purchase the car over two, three
or four years if desirable, and can also elect
to pay a deposit (zero deposit is the default)
or fully amortise the finance so that there is
no balloon payment to make at the end of the period.
Few employees will maintain the mileage
profile that they originally select, and often
will find themselves with a new role or location
that could significantly alter their mileage.
Accordingly, budgets are set at different mileage
bands within the same level, and any major change
will result in a new budget. If a budget is increased,
so is the maintenance to cover the additional
mileage and reduced residual value.
Effectively, employees see little
or no difference in their net costs, and the same
rule is applied for those reducing their mileage
profile.
The Toomey Opticar Scheme
Plan
• Consultation
Phase
At the start of this process there are three main
objectives. The first is to establish your requirements
and goals, both immediate and longer term. You
may wish to reduce your costs, provide tax protection
for employees, develop a more effective benefit
for recruitment and retention, or simply remove
the hassle of running a car fleet.
The second is to examine your current
car benefit policy in the light of your requirements,
and determine what can go and what should stay.
For example, your plan may require Optifleet to
manage your cash allowance population as well
as company cars and some form of structured (ECO
style) scheme.
The third objective is to define the
information exchange and actions on both parties
in order to meet your operational timescales,
and develop a clearly defined roadmap to take
the scheme from cost analysis through to implementation.
• Cost Analysis
| With the aid
of analysis tools developed specifically for
this purpose, we will determine your current
company car costs. Whether you lease, buy
outright or otherwise finance your fleet we
can quickly arrive at some benchmark costs
for each car grade. |
There is a fair amount of data that needs
to be assessed, and this phase can take a
few days of effort until we are both happy
with the figures. It is however, extremely
important that all current, and potentially
future, car costs are known as these will
form the basis of employee budgets in the
new policy. |
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The final part of this process is to see how
much you would have to compensate employees
in order for them to drive the same car under
the Optifleet scheme. This is achieved using
live data from the online system. |
• Setting Budgets
Based on the information gathered, an analysis
of all car grades with a number of different mileage
profiles is performed in order to assess the savings
obtainable. This can be weighted according to
your mileage records to date, but the objective
here is to establish the base budgets for employees
to remain salary neutral.
A proportion of the projected savings can then
be added to each base budget to add value to the
scheme for employees, but this very much depends
on the results of the initial consultancy.
Budgets will differ at each car grade
and at each mileage profile, so that all employees
can obtain similar cars regardless of mileage.
These can be tuned still further, in order to
attract higher business mileage drivers into the
employee owned scheme, and to keep low business
mileage users in the company cars if that is a
requirement.
• Setting Contributions
All employees pay for the use of a company car,
either through taxation, as a contribution to
the monthly cost, or a combination of these.
Depending on the scheme objectives,
the contribution can be a fixed sum per car grade
(or none), a contribution equivalent to the Benefit
in Kind (BIK) taxation they currently pay, or
one based on the car they select.
The actual calculations can themselves
be varied, so that if you wish to be more certain
of your predicted savings, the contributions would
relate to benchmark cars at each car grade rather
than the choice vehicle.
• Benefit In Kind (BIK)
The BIK tax charge for company cars is currently
based on the CO2 emissions percentage of the vehicle
multiplied by the list price and then by the relevant
tax rate. It does not take into account business
usage, so the current system penalises "business
need" drivers (who have generally seen an
increase in their tax) in favour of "perk"
drivers who have made considerable gains over
previous regimes.
This inequity in tax treatment can be reduced
or eliminated by careful adoption of a mixed fleet
strategy, combining employee owned and company
cars.
The online system can calculate a
BIK contribution in a number of different ways,
so the method used is really decided according
to your objectives. We will calculate several
different alternatives in order to find the right
formula.
• Design Phase
The information displayed to employees can be
as simple or as comprehensive as you require,
and can be reviewed regularly if necessary.
Depending on the results of the foregoing
phases, several options will be presented to you
and the final selection tuned to your specific
requirements.
You may feel it appropriate at this
stage to have the scheme presented to a selected
audience, not only to assess the saleability of
it to employees, but also to obtain feedback on
the screen design.
• Inland Revenue
The Inland Revenue Authorised Mileage Allowance
Payments (AMAPs) are paid according to actual
business mileage logged. There is no underpayment
or overpayment, and no requirement for costly
"end of year" mileage reconciliation,
as is commonplace with most ECO schemes. This
payment of actual AMAPs paid as they are accrued
makes the Optifleet Scheme unique, giving significant
cost benefits to the company.
We will provide any assistance necessary
to obtain scheme approval from the Inland Revenue
for you, including representation if required.
• Implementation
Prior to individual employee participation,
we recommend a series of presentations so that
employees have the opportunity to understand the
scheme and the reasons for it.
As soon as employees are registered
on the online system, they have access only to
their personal account. Their car grades and budgets
are predefined (although variable according to
mileage profile) and they can then begin the process
of car selection and mileage recording.
Each employee account also contains
copies of the scheme guide; help facilities, and
all relevant documentation. This does not replace
direct contact with Toomey Opticar via the help
desk, but it does prevent any misunderstanding
of the scheme or its’ components.
Scheme Management and Components
• Website
The management system is delivered by a client
specific secure website. The information displayed
can be as comprehensive or as simple as desired
and can be continually reviewed. The website contains
specific individual profiles for all the drivers.
They log on to the site using their email address
and a password that can be personalised after
logging in for the first time. The website contains
all the information needed for management of the
scheme including personal data, general information,
an area for mileage logging, new car selection,
quality improvement process input (QUIP) and contact
information. In the General Information area is
the scheme guide along with various forms and
documents that may be needed in the management
of the scheme. The scheme guide contains a detailed
description providing all the information needed
to use the scheme.
• Car Selection
Employees enter the online system with their
unique login and password. As they can only access
the scheme set up specifically for your company,
they will be constrained to your specific parameters
which may exclude certain types or makes of car.
Once logged in, they will be dynamically assigned
to the "least cost" route determined
by the initial mileage analysis.
The cost of the company car and the
employee owned car are shown, and employees may
select either option depending on the parameters
assigned, but at least cost to the employer.
Each selection should indicate to
employees just how much their selection would
cost (or save them) each month.
This screen also allows employees
to view the standard specification of their selection,
and to add any optional extras. Once happy with
their choice, employees then submit the form to
Toomey Opticar for a firm quotation, availability
and formal order.
• Finance
The Credit Sale agreements for the employee
owned or Cash Allowance cars are based on zero
deposit 24, 36 or 48-month finance contracts directly
between the finance company and employees. There
is no contract with the employer, although special
terms as a result of any additional manufacturer
support your company may receive can be included.
Every employee wishing to take an
employee owned or managed cash car is individually
underwritten with no employer guarantees or support.
Consequently, the employer plays no part in the
sourcing, funding or supporting of the car or
finance at any time.
The finance can include the cost of
Guaranteed Asset Protection (GAP) and Early Termination
insurance to enable employees to terminate their
car in the event of redundancy or resignation.
• Insurance
It is increasingly common practice to utilise
a company’s corporate motor insurance policy
to cover employee owned cars, creating a level
playing field for all drivers and mitigating any
“Duty of Care” issues. Alternative
cover can be sourced for employee owned drivers
but it is not usually the most cost effective
route.
In addition there are two different risks covered
with PCP insurances, both of which are intended
to put employees in the same risk-free position
that they would be in a company car.
GAP secures the difference between
the outstanding finance balance and the price
the insurance company is prepared to pay in the
event that the car is written off or stolen.
Early Termination insurance allows
employees to hand the car to the insurance company
for settlement of the outstanding finance in the
event of unemployment, resignation, death or pregnancy.
Terms and conditions apply to all
the insurances, and these are clearly communicated
to employees before they take up the scheme.
• Maintenance
An integral and mandatory component of the scheme,
maintenance covers every eventuality. Full servicing,
repairs, tyres and breakdown recovery are included
as standard. Employees have access to a 24/7 Driver
Line to keep them safe and mobile at all times.
All cars are monitored to ensure that
they are maintained according to road safety regulations
and manufacturers guidelines, and if we are in
any doubt we will have the car checked by an independent
automotive engineer. Risk Assessment records are
maintained as part of system, and reports are
available as required.
• Mileage Logs
The accurate recording of business mileage is
necessary not only for compensation purposes,
but also to meet Inland Revenue requirements.
Employees complete details of business mileage
in the online mileage log and, at the end of the
month submit this to their manager for approval.
The approval process does not require
the manager to do anything other than check the
details of the log, and to reject it if it cannot
be validated. Each log is then registered on our
website servers, adding to the audit trail and
providing us with sufficient data to produce the
salary adjustments each month.
Employees must keep and submit this log on a monthly
basis in order to receive their budgets on time,
but the system generates a number of reminders
to ensure that they do.
• Salary Adjustment
Unlike the more common cash-for-car programme,
the monthly cash allowance is paid net of tax
and NI. This means that any salary adjustment
required to meet the net budget less contribution,
whether positive or negative must be grossed up
and accounted for in employees’ salary.
On or before your pre-determined salary
cut-off date we will send you a list of all participants
in the scheme itemising the amount of AMAPs payable
and the appropriate net salary adjustment. This
will include business fuel costs and private fuel
if that is your requirement.
Employees can see details of their
own salary adjustments by accessing their online
accounts, and this can then be checked with the
payslips at the end of the month.
• Help Desk
The help desk is available during normal working
hours and is intended to assist employees with
accessing and operating their online accounts
as well as answering more general queries.
The help desk team have access to
the administration functions of the system, so
that callers can be assisted online and “walked
through” the different functions of their
account.
Passwords can be reset, mileage logs
corrected, and even the interpretation of payslip
data can be handled through this media, and any
necessary confirmation or documentation emailed
directly to the caller during the call. A key
objective of the employee owned part of the scheme
is to replicate “the comfort of a company
car” and provide the drivers with the support
usually associated with company cars.
In conclusion, Optifleet provides an effective
alternative to the traditional company car benefit,
combining company and employee owned cars that
maximises the tax efficiencies and addresses many
of the HR issues.
If you would like to find out more
and have a no obligation discussion with one of
our Consultants, please contact us as below
Toomey Opticar Limited
Byron House
43 Cardiff Road
Luton
Bedfordshire LU1 1PP
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