Case Study: Achieving compliance, control and convenience

An existing customer contacted CBS in search of a robust solution for their company car fleet

Tags: Automotive Consultancy ECOS Taxation

Case Study: Achieving compliance, control and convenience

Introduction

An existing customer and AM100 Dealer Group contacted CBS in search of a robust solution for their company car fleet. Although currently operating a CBS staff car scheme with a fleet of over 200 vehicles, the client had opted to operate their management and demonstrator fleets internally with the assistance of a 3rd party consultant. They sent a notification of this arrangement to HMRC but received queries surrounding the operation of their scheme. As the initial set-up of their scheme was already operational, the client faced the dilemma of how to address the points of uncertainty that were raised.

Problem

As a trusted provider of their staff car scheme, CBS were asked to review the HMRC response during a site visit and our consultancy team agreed to conduct a compliance audit, making suggestions as to why the queries were likely to have been raised and providing recommendations where CBS could offer assistance operationally.

The review identified that there were two major pitfalls to the internal scheme. Firstly, the contracts could have been interpreted as regulated agreements without the necessary FCA permissions and secondly, employees were exposed to Benefit in Kind liability at the end of the agreement.

It was clear that the internal scheme posed a risk to both the employer and their employees. CBS provided the following summary of how a robust, externally managed solution compares to attempting to manage a scheme internally without the necessary resources and expertise.

Solution

CBS were asked to design a proposal that provided all the benefits of running an ECOS internally at a similar cost, ensuring repayments were fixed and affordable for drivers.

The client was also keen to address the compliance issues raised at the audit and the consultancy team provided information and evidence surrounding why CBS have the necessary permissions to issue regulated agreements, and the meticulous and comprehensive process that CBS follow when assisting clients through the full disclosure process to HMRC. It was also explained how the CBS solution could protect employees from Benefit in Kind liability should the cars not be retained by the employee and go on to make a loss at the end of the agreement.

Upon review, the operating platform and systems provided by CBS alone would save the employer over 800 man-hours annually, whilst the controls and compliance of the managed scheme mitigated the risks that were highlighted for the business and their employees. A tiered solution over a fleet of more than 150 cars also ensured that business costs were controlled, whilst delivering a significant saving for drivers in comparison to company car tax.

Outcome

The client understood and was reassured by the benefits gained in having an outsourced, compliant and managed solution for their drivers. They were also satisfied that further savings could be enjoyed under the scheme solution and it was agreed for CBS to commence a phased roll-out from the top down with all management and demo cars placed on a change cycle over a 6-month period.

Following the 1st stage of the implementation, the client noted the difference the scheme had made operationally and that they felt the burden of managing an internal scheme had been lifted both from a compliance and resource perspective, all whilst delivering efficiencies that provided a boost to bottom line profitability.

To see just how much a compliant, outsourced solution from CBS could benefit your business, please contact your Regional Manager.

 

 

 

Contact Details

The Barracks,

400 Bolton Road,
Bury, BL8 2DA

Monday - Friday

8:30 - 17:30