Judge Rinder Hands Out An Incorrect Ruling!

Wednesday, 12. April 2017

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

Shock horror, could Judge Rinder have got it wrong? As often happens, when anyone I know sees anything on TV that is mildly motor finance related they alert me to it so on Monday when the camp Judge Rinder, with an even stranger sense of humour than me, presided over the sale of a van, I forced myself to watch whilst he patronised those who were ushered into his ‘court’.

I was about to turn it off when John and Frank appeared. It seems that Frank has a building company and runs a fleet of vans. His old friend John, who is a painter and decorator, needed a van and agreed to buy an ex company van personally from Frank’s company for £1,000. The van was what’s known as a Combo so it had rear seats, the sort of vehicle that can be used for business and as private transport.

Everything said so far indicated a private purchase. All good so far but within 4-5 weeks John experienced some major problems with the van. Firstly he had problems with the windscreen wipers, then the diesel pump failed followed by a very dangerous fault with the steering. Clearly for the vehicle to go faulty so soon after buying it suggests that the faults pre-existed.

Frank’s case wasn’t helped when he explained that the van only had 3 months MOT left on the vehicle and it had no service history. Judge Rinder suggested that as the van still had 3 months MOT on it that this proved that the vehicle was roadworthy –  what planet does this twat live on? And the vehicle was sold without any service history but Frank gave John assurances that the van was sound (a northern word – means working OK – I can be just as patronising).

Anyway, moving on, John gave back the van to Frank who had the van repaired but charged John the £400 it cost to repair – I’ll deal with this in a moment but Judge Dopeynuts then asked John if the van was now driving OK? He said he didn’t want to drive it as it no longer felt safe to drive and lights had appeared on the dashboard, to which the ‘Judge’ responded by asking why he wasn’t driving the van as it was now repaired.

Had he arranged for an independent inspection that resulted in John being told not to drive it? No was the answer but whilst asking the question they showed a picture of the dashboard which displayed two warning lights. One was orange and the other red. Now if the Judge knew the slightest thing about cars and vans he would know that if an orange light comes on it is a warning, washer fluid is low – that sort of thing, but if a red light comes on you stop the car immediately and don’t drive it till the fault has been investigated so John was right not to drive the car – Judge Twat!

Our good friend Judge Rinder then makes a complete arse of himself by challenging John about whose responsibility it was that the vehicle was faulty. I agree that the John could have been more careful and the fact that the van only had 3 months MOT on it and no service history should have caused him to at least have the vehicle inspected but that isn’t required in law.

Rinder (notice how I’m now referring to him as Rinder – total disdain) pointed out a piece of law called in Latin, Caveat Emptor which means buyer beware. This applies to a purchase from another private individual, NOT to a purchase from a Limited Company. Now I should add at this point that he kept referring to John buying the van from Frank but at the start of this item Frank went to lengths to explain that this was one of a fleet of white vans that he runs in the business. So one can assume this was sold to John by the company.

This being the case under European Law, the Sale Of Goods Act and the Consumer Rights Act the same protection is provided to a consumer as if he had bought the vehicle from a car dealer. Rinder went on to point out that Frank wasn’t a specialist in vehicle sales and he even went on to say that the documents were in order to prove that the vehicle was safe. How ridiculous, there was no service history and a 9 month old MOT.

John was relying upon the word of his friend and therefore the company from whom he bought the vehicle. Clearly Rinder has no knowledge of the European 2 year unconditional guarantee that everyone must provide, unless the seller is a private individual, on all new and second hand goods. Over and above that our own Consumer Rights Act gives you similar rights.

Even if the van was sold as a private sale the seller is not allowed to misrepresent the goods. Frank told John that the van was in good condition even though he wasn’t qualified to make that statement but the fact that the van was sold as faultless under the Misrepresentations Act 1967 John would have a claim against the seller as a result of false or fraudulent claims.

But that is if the vehicle was sold privately, which it wasn’t. When summing up Rinder pointed out, quite incorrectly, that as John had bought the van from a friend who wasn’t a specialist seller of vans, he bought the van as seen. That my friend is simply not the law! If your local estate agent managed to buy a batch of TV sets and sold them through his shop and the TV set you bought proved to be faulty would you expect to have no consumer rights against the seller as he was not a specialist TV seller?

Ridiculous. John not only paid £1,000 for the van but also a further £400 for repairs to be left with an undriveable van! To add to the pain the so called Judge found against John who should now be seeking a solution through a proper court. Good grief! By Graham Hill

What To Do When Your Car On HP or PCP Is Faulty

Friday, 24. March 2017

For years I have been advising customers, SME’s and consumers in general about their rights regarding the purchase and finance of vehicles and what to do when things go wrong. You buy a vehicle and finance it on HP. In these circumstances there has always been an obligation on both the supplier (the dealer) and the provider of the finance as the transaction is regarded to be a ‘linked transaction’.

This made both parties jointly liable if a car that you bought subsequently displayed a fault that could be proven to have existed when the car was sold to you. This doesn’t just apply to cars, it applies to any other goods that you buy this way. However, had you ignored the dealer and complained to the lender in the first instance he would normally direct you, quite incorrectly, back to the dealer ‘as he supplied the car so is liable’.

I’ve even had rows with very senior members of staff at HP companies pointing out that the rights of the customer are exactly the same whether dealing with the finance provider or the dealer who supplied the goods. In fact as we now learn from the Financial Ombudsman it is the finance company who should put matters right. More of that in a moment.

But for most people this is where it starts to get strange because let’s say that the car was advertised as having 6 forward gears and when you bought the car the spec. of the car showed 6 forward gears and even the salesman explained that the car had 6 forward gears but when the car was delivered you find that it only has 5.

The car can be rejected as ‘not as described’ but the HP company is as liable as the dealer even though he was not party to the negotiations. Strange but true – but this isn’t the end. According to one law firm some of the confusion has now been clarified – or has it? According to them there is a very clear process. The car is inspected and agreed upon by the consumer prior to the purchase. In turn he agrees to take out HP or PCP and the car is invoiced to the lender.

The lender now owns the car and the transaction between the lender and the dealer is a commercial transaction and doesn’t fall within the rules of the new Consumer Rights Act. As a consumer your rights within the Act are now between you and the lender. If the goods are faulty, not fit for purpose or not as described you have a case – only against the lender. So if you take up the case against the lender don’t be pushed back to the supplying dealer. That is the lender’s problem – not yours.


As most lenders are very keen to get the case off their desk they are unwinding the finance and taking back the car then forcing the dealer to take the car back from them and refund to them the price paid under threat of withdrawing their credit facilities. The firm of lawyers is suggesting that the dealers start to fight back, no doubt earning the firm of solicitors fees. This won’t affect you as you have already returned the car, had the finance unwound and had your money refunded.

They are also suggesting to dealers to prevent the situation from happening in the first place by explaining to the customer something along the lines of, ‘We think highly of our customers and our cars so if you have any problems within the first 6 months of having the car please let us know and we will do our best to resolve the situation to everyone’s satisfaction’. Not strictly the law but can avoid losing heavily by having to take the car back from a sympathetic lender. Know your legal rights and don’t be afraid to exercise them.

A couple of final points from the Financial Ombudsman Service from their website:

Where the dealer offers you a ‘Fixed Sum Loan’ that is linked to your car purchase this is covered by section 75 of the Consumer Credit Act making the dealer and the lender jointly and severally liable:

For fixed-sum loans, it is because the transaction is covered by section 75 of the Consumer Credit Act 1974.

However, if you take out a loan separately from a bank or building society you are not covered by section 75. It has to be a transaction linked to the car at the point of sale.

Surprising to many, a Hire Purchase agreement does not fall inside section 75, here is what the FOS says:

Hire purchase agreements are consumer credit contracts that give the consumer the right – but not the obligation – to buy the goods at the end of the hire purchase term. Section 75 does not apply to hire purchase.

However, with so much confusion, the FOS will consider all claims from consumers for faulty goods, not fit for purpose or not as described. From my experiences the FOS will go to great lengths to lend a sympathetic ear to consumers and they don’t cost you anything. At the end of the process you can still sue the company concerned, especially if you feel that severe damages should be awarded. The FOS is restricted as to how much compensation it can award. By Graham Hill

Pre-registered Cars vs Ex-demonstrators

Tuesday, 17. January 2017

Over the near 30 years that I have been in this industry I have seen and done many things, seen some of the most crooked activities carried out by dealers, brokers and car supermarkets, amongst others, as well as fraudulent attempts to acquire cars by crooked customers.

For many years I was an expert witness for the Crown Prosecution Service in cases of vehicle and asset finance fraud so I’ve seen most things crooked that go on in the automotive industry, some of them revolving around so called pre-registered cars and ex demonstrators.

Whilst I won’t bore you with all the fraudulent things I’ve witnessed, you’ll have to buy my upcoming book for that, I’ll share a couple of things with you as I’ve had a couple of potential clients who have recently avoided contract hiring a new car in favour of a so called pre-registered car or an ex demonstrator on HP or PCP.

First of all I should point out that it is possible to get a good deal on an ex demonstrator but it’s the luck of the draw and I’ll explain why. But let’s start with ‘pre-registered’ cars. First of all let’s be quite clear, there is no such thing as a pre-registered car in the way that it is advertised by dealers. Even the head of CAP HPI refers to pre-registered cars when referring to cars that are registered then sold when they include huge discounts. The pre-registering of highly discounted cars is an illegal act made illegal by Stephen Byers when he was Labour Trade Secretary in 2000.

He was concerned that the practice carried out by manufacturers who forced their franchised dealers to buy cars, albeit at heavily discounted prices, was skewing the new car registration figures. So as part of his Supply of New Cars Order 2000 it was made illegal to pre-register cars, here is the excerpt:

This order was made under the monopoly provisions of the Fair Trading Act 1973. It prevents new car suppliers from:

  • discriminating on price between dealers and fleet buyers
  • providing bonuses and discounts to dealers on pre-registered cars
  • imposing on dealers restrictions on price advertising

Now let me be clear, dealers can pre-register cars but not as a result of increased incentives applied by the manufacturer on individual cars. However, some dealers and manufacturers have found a way around this. As an incentive and across the board, a dealer will be set a sales target for the month/quarter/year and he will be paid a Volume Related Bonus (VRB) by the manufacturer if he can achieve the target.

This money is paid retrospectively on all cars sold during the month, quarter or year. As the bonus is not specifically on the ‘pre-registered’ cars they kind of get around the regulations. As an example let’s say the dealer is offered a VRB of £2,000 per car provided he hits his target of 100 cars for the month. With a few days to go he has sold 90 cars and he is aware that if he doesn’t sell the 100 he will lose £200,000 VRB.

So in order to hit his target he pre-registers the 10 cars in the name of the dealership and pays his normal purchase price for the cars – keeps him onside with the Supply of New Car Order. He now factors in the £2,000 per car that he will receive as additional discount then adds in the normal discount that he would include in the deal making the car a cheap car.

I’ve heard of some dealers preregistering cars and selling them through auction just to recover a reasonable proportion of the money spent out rather than have the cars sitting on their forecourt. Whilst the above may sound like pre-registered cars are a great idea there are other, far more shady, methods used to heavily discount cars and sell as new cars even though they have already been registered. Some, not all, car supermarkets have been known to use this method as well as some dealers.

The cars are diverted from where they were intended – daily rental companies, driving schools or insurance company/bodyshop courtesy cars. When supplying cars to these companies the manufacturer uses part of his marketing budget to heavily discount cars that either get them seen on the road more or are driven by potential buyers. In my experience a daily rental company can buy cars at up to 45% off the list price with 20 – 25% being very common.

In order to get around the Supply of New Car Order dealers started to set up their own daily rental companies and bought their ‘pre-registered’ cars through the new operation at huge discounts then sell them on to buyers, having never put them out on hire, with just delivery miles on the clock, on big discounts as ‘pre-registered’. Nothing wrong with that. Of course the extra name in the log book will affect the resale value of the car – but only marginally. But this is where the 3 month rule comes in.

If you have ever bought a pre-reg. car you will sometimes be told that you won’t receive the V5 log book until after 3 months. This is because in order for a daily rental company to qualify for the extra discount they (normally) have to keep the car for a minimum of 3 months or say 5,000 miles, whichever comes first. Now if the manufacturer wants to carry out an audit the dealer needs to be able to show the auditor that he still has the car.

Whilst he may argue that the car is out on hire, so can’t be inspected, he can produce the copy of the V5, supposedly proving that he still has the car, and everyone is happy. Again, whilst this is shady, is this something that a buyer should worry about? There are also some dealers who will keep the cars in stock for 3 months to avoid this situation. But here’s the crunch. Remember that I said these cars were intended for daily rental companies and they are then supposed to be sold as used cars after 3 months?

Well, many years ago I became involved in this process. Before realising exactly what was going on, I had been arranging stocking finance for wholesalers who would arrange to buy batches of brand new cars from daily rental companies and sell on to car supermarkets for a small profit, similar procedure to the operation following the Stephen Byers order.

This allowed the car supermarkets to sell new cars at less than main dealers could buy them for. The daily rental company would order say 100 cars that would be funded by the wholesaler. The cars would be diverted, at the time of delivery, to the wholesaler who would pay the daily rental company £100 per car for their trouble – they never actually saw the cars.

However, as the cars were intended for daily rental I had calls from dealers, and one comes to mind, who would say that the manufacturer had produced a batch of cars using up old stock of parts, for sale to daily rental companies. In this particular case the interior trim was lower grade, items were missing in the car such as cup holders and front fog lights were missing, all part of the standard spec. of the model badge on the back of the car.

In return the dealer knocked off £250 per car. The wholesaler agreed but do you think he explained this to the supermarkets who were selling these cars as brand new but pre-registered cars? Of course not! It would be fine to sell the cars in their sub spec. condition to the daily rental company who were supposed to rent them out.

A customer is hardly likely to refuse a rental car because the interior trim didn’t match the manufacturer’s brochure for the model he was hiring. And of course they were to be sold as used cars at the end of the 3 months or when they had covered 5,000 miles so the buyer would be buying not a new car but a used car as seen.

There is another way that you can achieve a big discount on a ‘pre-registered’ car. When there is a new model coming out or a facelift on the current model the dealers need to make way for the new model and get rid of the old model cars so he practically sells them at cost but they don’t always tell you about the new model.

I’ve also heard of cars turning up at the customer’s house only to find that he has bought or leased an old model car when he thought he was buying the new model. So check the spec. very carefully if you are going to buy a pre-registered car – it may not turn out to be what you thought you were buying. Oh and some of the cheap lease deals are cars as illustrated above so make sure that you check the spec. meticulously.

You sometimes get what you pay for. Moving on to ex-demonstrators. There are two points to be made here. First is the discount. Demonstrators are taken by dealers not just to demonstrate the basic car. They will often have a mass of options fitted, clearly so that they can be demonstrated to potential customers.

So when they tell you that they will knock 8 grand off the list price of the car that’s the list price including the options that may still make this used car, having had multiple drivers, more expensive than the brand new car with the standard spec. which is what you were originally looking for.

Their trick is to compare the cost of the demo with the full list price of the new standard car – but you’d not have paid full list on the new car in the first place. Balance up the desire of the options and the fact that the car is used against a new car without the options and with a discount. Secondly we have perception.

When you call into a dealership and take a demonstrator out with a nice salesman beside you, toodling along at 30 mph you believe that this is the way that all ex-demonstrators have been treated. Well, let me correct that perception. Many years ago in industry as general manager in one of the UK’s most successful PLC’s, I had a fleet department report into me, responsible for around 700 vehicles.

With a fleet that size we were signed into the manufacturers’ demonstrator programmes which meant that every day transporters of brand new cars would turn up, with virtually every make of car on board, that we would have on loan for anything up to 3 months, often 2-4 weeks. I would allow our sales and service staff to use these cars. As they weren’t their own company car they would proceed to ‘burn rubber’ out of our depot and treat the cars like rallycross cars till they were returned.

As we didn’t own the cars I wasn’t worried but at that point I thought to myself I will never ever buy an ex demonstrator as I know how many of them are treated. Oh and often dealer sales staff get to use the demonstrators for personal use and I’ve seen the way they drive them away from the dealership so I strongly recommend that you give ex-demonstrators a very wide berth or you may end up spending more time waiting for repairs to be carried out than actually driving the car! By Graham Hill

How Are UK Roads Made Unnecessarily Dangerous By Drivers?

Friday, 12. August 2016

How safe are our roads? This general question often refers to the general condition of our roads, how well they are maintained in bad weather, the safety of our cars and how well the cars are maintained. But what about the health of our drivers? Could drivers’ health affect the safety of our roads?

It would seem that whilst most drivers take things like drink driving very seriously and wouldn’t dream of driving a car without wearing a seatbelt it seems that they are nowhere near as vigilant when it comes to their health. Watching TV with a little bit of a squint is maybe a bit of an inconvenience and not focusing too well when reading the paper may be a little uncomfortable but what about driving?

As responsibility falls upon drivers to self regulate their eyesight how many actually meet the minimum standards? Many drivers are shocked when they finally feel the need to have an eye test and find that they badly need to wear glasses. If you drive with faulty eyesight you can be prosecuted but it’s a bit late if you are dead or badly injured in hospital or you have hit a cyclist or pedestrian that you didn’t see.

With an estimated 4 million drivers considered to have deficient eyesight, i.e. more than 10% of all drivers, how dangerous are our roads? We can add other conditions to poor eyesight, many of which are not considered as dangerous. This time of year there are those with hay fever who take anti histamines that, whilst a legal drug, can impair the driver’s ability to control a car.

Those with a bad back pain can be distracted because of the discomfort or could take strong painkillers that could impair their driving and slow down reaction times. Conditions such as sleep apnoea are not fully understood by those suffering who may believe they simply feel tired occasionally but if you have the condition it is even more important that you stop driving more quickly than those simply feeling a little groggy.

The fact is that our roads are made more dangerous by those who drive on them with a range of medical issues from poor eyesight to a dodgy knee. Is it about time that we all took greater responsibility and stopped putting ours and other’s lives at risk. Always read the labels of any medicines you are taking, even when they are bought over the counter, and follow the warnings. By Graham Hill

Consumer Rights Act 2015 – A Strange Case

Friday, 5. August 2016

I have been reading one of the first cases I have seen that put the Consumer Rights Act 2015 to the test. I won’t go into the fine detail but a customer bought a 10 year old used car from a dealer. A short while after buying the car a light appeared on the dashboard.

The client called the dealer and complained, in turn the dealer told the driver to either bring the car back for them to inspect or call out the emergency roadside assistance, provided with the car. The client did neither and continued to drive the car whilst the dealer tried on 3 occasions to contact the customer. The driver then decided to exercise his rights to reject the car under the new Act, the dealer refused to accept the rejection and the case went to court.

Now clearly the driver did all the wrong things and it was found that the car needed a faulty crankshaft sensor replaced costing £49.69 but my real problem with this case is: when is a car considered to be of Unsatisfactory Quality? And the final statement from the dealer’s lawyers threw doubt on the decision.

First of all having a warning light appear on the dashboard for something more than low oil or water would cause me immediate concern. And whilst the diagnosis was that a faulty sensor needed replacing is this enough to reject the car? We all tend to suffer from the fear that when something goes wrong on a car – could this be the start of a string of faults? I have never heard of a crankshaft sensor, let alone one that goes faulty.

And simply replacing the sensor without stripping down the engine to check the crankshaft would worry me greatly and I would most certainly want to reject it. Added to which this is what the lawyer said at the end of the case: ‘The final element was that any damage which is caused by the claimant’s own negligence is not something the trader is liable for.’

I could understand that statement if the problem wasn’t the sensor but the crankshaft itself but they claimed the fault was just a faulty sensor which wouldn’t cause secondary damage to the car. So why make the statement, was the damage more than just a faulty sensor and there was a cover up going on?

The case is over but it has left a bad taste in my mouth and it tastes like a load of bull’s droppings. Not that I’ve tasted bull’s droppings but you know what I mean! By Graham Hill

Does A New MOT Prove That A Car Is Roadworthy?

Friday, 4. March 2016

Did you know that an MOT test certificate does not prove that a car is road legal. Many car dealers believe it does as do most customers. But let’s take an example whereby a used car on a dealer’s forecourt has been on a test drive and hits a pothole that forces the wheel alignment out.
Not so much that you would feel it in the steering but this damage could be the future cause of excessive tyre wear or even worse cause an accident. You test drive the car and agree to buy it. True to his word the dealer has the car MOT tested  before you take delivery but wheel alignment is not part of the MOT test but it is illegal to drive a car whose wheel alignment is out.
If you find the fault, hopefully not after an accident, the dealer will probably say that the car was roadworthy when you bought it because it had a brand new MOT certificate, issued the day you bought it. It’s a con. There are a number of other items that could be wrong with the car making it not roadworthy but are not part of an MOT test.
And if the MOT is 3 months old there is an even greater chance that it may not be roadworthy as an MOT is a snapshot, much can go wrong over 3 months. Finally on this point Trading Standards are considering a formal prosecution of a dealer who sold a car to a customer two and a half years previous to him being involved in an accident.
The accident was caused as a result of the car having a fault that made it not roadworthy which was shown to have existed at the time of purchase. The dealer argued that the car had a new MOT when sold and had been through 2 MOT’s since but the fault was not part of the MOT test so Trading Standards are prosecuting. If the outcome is reported I’ll let you know. By Graham Hill


Emissions Testing To Be Tightened Even Further By EU

Thursday, 25. February 2016

The EU Commission had already made it clear that emission testing would be tightened up from 2017 but they have now announced that they will be going several steps further. As a result of growing mistrust of the emissions testing procedures which were to reflect real life motoring conditions by 2017 the Commission has announced a number of additional rules.

First of all, instead of randomly selecting cars off production lines to test they will in future be selected from cars that are already on sale as well as cars from production lines. Recalls will be issued if cars are found to emit different levels of regulated emissions than those suggested by the manufacturer. Financial ties between European test centres and the manufacturers will be cut (I didn’t know there were any), thus making the system fairer.

It seemed that testing could be carried out in any country within the EU in the past for it to be accepted across the EU. So manufacturers were having cars tested at centres where they knew controls were more lax. This is being address with greater controls being imposed upon the test centres.

The Commission is also applying for additional powers to suspend, restrict or withdraw the number of services that a test centre can offer if it is performing at a less than acceptable level. The Commission is also pushing for access to new car ‘software protocols’ and the ability to restrict the use of such devices as the ‘defeat device’ used by VW. I’d have thought these sorts of devices should be banned rather than just restricted!

Whilst it seemed to be a move in the right direction there were some observers who believed the new rules still ‘lacked teeth’. In a damning statement Greg Archer, green vehicles director at campaign group Transport & Environment said, ‘Without the threat of future EU sanctions, it will be  mission impossible to break the strong bond between national regulators and their car makers that has protected the industry but at the cost of higher emissions.’

And I thought I was outspoken! The EU Parliament is now considering the proposals ahead of a debate and vote. If approved the new rules will come into force immediately = as if that could happen! Ridiculous! By Graham Hill

Car Industry Is Suffering A Major Labour Shortage

Monday, 15. February 2016

When I was out with my mates on a Friday night when I was in my twenties, our topics of conversation didn’t include things like the economy, immigrant crisis (although with the surge of immigrants from India and Pakistan at the time maybe it should have been), the weather or the price of a loaf of bread.

As none of us was particularly passionate about football it meant that the whole of the evening was taken up discussing women, cars and more cars. We were preoccupied with radial tyres, straight through exhaust systems and go faster stripes but the new generation of car drivers struggle to understand the concept of checking oil levels and tyre pressures, more interested in the number of watts that the stereo system kicks out and whether the car has heated seats.

There is still a passion for driving cars but not for the way cars are made and run, hence the reason why I believe we have a serious skills deficit in this country. We know that there is a lack of doctors and nurses and some joke about the number of plumbers, electricians and carpenters that have come to the UK from Poland, because we have a lack of qualified specialists in the UK.

But I wasn’t aware that we had a similar problem in the car industry. It seems that manufacturers are having to look abroad for people to work in engineering and on the factory floor because we have a severe skills shortage. I was as surprised to read that it doesn’t stop there.

We even have a severe shortage of sales staff to work in dealership showrooms. Andy Palmer, CEO of Aston Martin who started working with the company as an apprentice, said that the problem spreads wider than the manufacturers.

The problem exists within the manufacturers of hi-tech parts that fit into the cars, they are also having to search abroad for labour or have the parts made abroad and import them. Part of the problem is the growth of the industry which is suffering from its own success.

Whilst the industry continues to grow faster than most other industries, with not enough people to fill the vacancies, there will continue to be a need to bring in labour from abroad, something that this Government seems to be fighting against. The same problem exists in my industry, that of brokers.

When I attend events that are attended mainly by finance brokers it is clear that our industry doesn’t encourage women to join the industry and with an average age closer to 60 than 20 there are few youngsters coming into the industry. This is all very worrying. By Graham Hill

VW Looking To The Future Beyond The Scandal

Thursday, 19. November 2015

As VW continue to fight fire as things get worse following the latest revelations that 800,000 petrol cars have incorrectly stated CO2 emissions. In a statement from VW following a question about the effects on personal tax of those driving affected company cars, they have said that they will stand any additional CO2 based tax due from drivers and went further asking that the Governments involved charge VW direct rather than involve drivers.

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We are yet to see the responses from Governments across Europe – this is getting very messy. In addition VW have issued an action plan. The new chairman, Matthias Muller, said in the plan, ‘We have to look beyond the current situation and create the conditions for Volkswagen’s successful further development.’ There’s an optimist for you.

The first of the 5 point action plan – aimed at the re-alignment of the group, is to support customers affected by what VW is now referring to as ‘the diesel issue’. The company is working towards finding effective technical solutions to help its models to meet historical Euro4 and Euro5 emissions limits which it plans to roll out in January 2016 having liaised with the German Federal Motor Transport Authority.

Second on the action plan list is to carry out a thorough investigation in to how the software that was allegedly installed to falsify emission figures, during certain testing conditions, came into existence and why. Muller added, ‘We must uncover the truth and learn from it’. They have also recruited audit firm Deloitte to assist with the investigations and added that ‘those responsible for what has happened must face severe consequences’.

Third on the list is a total re-organisation of the group in an attempt to ensure that this can never happen again. Group management is to be decentralised to a greater extent in the future with individual brands and regions being given more independence. Muller said that the company would examine the portfolio of more than 300 models with a view to examine the contributions made by each model to earnings.

They will also look into ‘cross brand strategies’. The fourth ambition is one of openness. This will involve a realignment of the Group’s culture and management behaviour with a focus on retaining ‘the pursuit of perfection’ and employees’ commitment to the company. The company will change the way the business handles and communicates mistakes with an aim to create ‘a culture of openness and cooperation’.

Finally VW Group, which had a 2018 strategy, has replaced it with a 2025 strategy shifting emphasis from sales numbers to building ‘qualitative growth’. Muller revealed that they would be working on the new strategy over the next few months to be unveiled in mid 2016.

I have written several articles recently asking whether this ends with emissions. In the past manufacturers have been trusted to keep us safe in our cars and meet the many standards laid down by Governments. But is this the tip of the iceberg? Will other manufacturers be caught out fiddling emissions but worse have any of them been fiddling safety tests in order to sell more cars? By Graham Hill

Confusion Explained Over Business Mileage Claims

Friday, 30. October 2015

The rules have always been pretty clear when it comes to claiming back business miles when an employee uses their own car. These days I see more cars being funded privately than through a business as a company car, often to avoid benefit in kind tax.

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As an employee claiming a mileage allowance, again it is very clear, you can claim up to 10,000 miles per annum at 45 pence per mile which is tax and NI free, beyond 10,000 miles you can claim 25 pence per mile, again tax and NI free. All fairly straight forward but what if the car is an electric car as the HMRC do not regard electricity as ‘fuel’.

Also what constitutes a business trip? With regard to the electricity question how does this also affect hybrids that run partly on electricity and partly on petrol? I have read various reports regarding electricity which, whilst already confusing, are further confused if the company provides charging points in the workplace and therefore provides free electricity.

Some companies are paying the full fuel allowance but could this be a problem waiting to explode when the Revenue decides that as electricity is provided at work the employee cannot claim the fuel allowance. At the moment the consensus is that as there is no rate set for electric vehicles that employees can only claim for the electricity that they provide themselves. Totally unfair.

I will keep you posted on this one but in the meantime the Revenue has provided some guidelines regarding business miles as follows, recently issued under HMRC 490 Employee Travel – a tax and NICS guide for employers:

  • ‘Ordinary Commuting’ is specifically excluded from being considered a business journey. This is any travel between the employees home and a permanent workplace.
  • An employee such as a service engineer, who travels between different clients throughout the day and who has no normal workplace, can treat all his journeys as business miles, including the first and last trip of each day to and from home.
  • An employee who works for the same company at two different sites cannot treat as business mileage the journeys to or from either site and home. But any journeys between the two offices would be business miles.
  • Travel from home to a depot where an employee picks up jobs or tools prior to setting out on appointments would be considered commuting – the depot would be a permanent workplace, even if the employee spent the rest of the day away from the site.
  • If an employee leaves home and passes his permanent workplace, but does not stop, on the way to see a client then all the journey is business travel. If, however, he stops at his normal workplace for ‘substantive duties’, such as making a phone call, this would be treated as two journeys – a commute to his workplace, followed by a journey to the client, and only the latter would be classed as business miles.

So there you have it, up to date advice on claiming business mileage but still with many questions left unanswered such as stopping to do some shopping or drop the kids off at school on the way to a client, and so on. By Graham Hill