RSS feedsHere’s a quick way to turn £8 into £75 in just over a day. Step 1: drive a company car into and out of central London. Step 2: don’t pay the congestion charge.
Up to 10,000 company drivers perform this trick every month. Each incident incurs a minimum fine of £50 that has to be paid in the first instance by the leasing company that owns the vehicle.
Ultimately, the leasing company recharges the fine to the customer along with a processing fee of, typically, £25. That brings the total cost of ignoring or forgetting an £8 charge to £75. Fines rise to £100 if not paid within 14 days and £150 after 28 days.
When employers’ internal costs for allocating charges and recovering fines from drivers are added into the equation, the total bill for sorting out congestion charge penalties against leased vehicles probably comes to well over £10m a year.
In fact, the London congestion scheme is the number one source of penalties incurred by drivers of leased and rented vehicles.
Car lease companies processed 122,000 C-charge fines in 2005, according to the British Vehicle Rental and Leasing Association. That figure compares with 100,000 speeding notices and 87,000 parking tickets in the same year.
At present, the law only allows congestion scheme penalties to be transferred from the leasing company to the customer where leases are shorter than six months. The BVRLA is in talks with the congestion charge organisers to change this but, for now, the leasing companies have no option but to pay up and pass on their processing costs.
The BVRLA expects penalties to increase significantly as a result of February’s westward extension of the London congestion scheme, which increased its area to a 38-square-kilometre zone ringed by more than 600 cameras.
According to Transport for London, those cameras snap around 95,000 chargeable vehicles a day during charging hours.
Of those, about 15,000 are registered with TfL’s fleet scheme, which is designed to spare businesses from paperwork – and expensive penalties.
Businesses can join the scheme if they own or lease 10 or more vehicles. The daily congestion charge for fleet users is £7 instead of £8 and, more importantly, there are no penalty fines because TfL takes payments automatically via direct debit whenever a registered vehicle incurs a daily charge.
TfL have taken steps in the last two years to make the fleet scheme more accessible; lowering the original threshold of 25 vehicles and improving the online account management facility. Nevertheless, a lot of firms are put off by the annual charge of £10 per vehicle and the amount of administration needed to set up and maintain an account.
The enlarged C-charge zone might persuade more business vehicle operators to consider joining the fleet scheme.
The zone stops only a street or two short of the Earls Court and Olympia exhibition centres, for instance, and many occasional trade visitors are likely to cross the line into it while negotiating the surrounding one-way systems.
TfL says in its latest annual report on the congestion charge that a large number of charge-payers (the majority of whom are business drivers) enter the zone only once or twice a year. Recognising that unfamiliarity and confusion may lie behind some of the 5,500 daily cases of non-payment, TFL recently sent out millions of congestion charge leaflets with tax disc reminders.
Most company car drivers never see their car’s V5 or VED documents, of course, and firms need to offer drivers of leased vehicles guidance about paying the charge and who will be responsible for the penalty if they don’t.
Paying online at TfL’s cclondon.com website is the most popular solution for drivers who are not in either the fleet or residents’ schemes, with 30% of all charges now paid on the internet. The BVRLA urges firms to save themselves the cost of penalties by encouraging drivers to pre-pay the charge online the day before driving into London.
Other payment options include voice calls and SMS messages from telephones, and pay points in shops, car parks and petrol stations.
Last June, TfL changed the congestion charge rules to give drivers an extra day to pay. Originally, anyone who forgot to pay up before midnight automatically incurred a £40 (now £50) penalty charge.
The current rules give drivers until midnight on the day following their entry to the zone to pay – although it costs an extra £2 to use the next-day option.
Slicker operations, smarter payment systems and the larger charging zone mean that the scheme is expected to make an extra £40m profit in 2007 (it made £121m last year). Most of these returns will be invested into the capital’s loss-making bus network.
Next year, TfL wants to bring in a three tier charging system based on CO2 emissions. A handful of very clean cars will pay nothing; the vast majority will pay £8 as now, but VED Band G vehicles (including many MPVs as well as 4x4s and large sports cars) will have to pay £25 a day.
Meanwhile, TFL is experimenting with a vehicle tracking system that uses roadside beacons to pick up signals from ‘smart tags’ on vehicles. Mayor Ken Livingstone has said that a road pricing scheme using similar technology could cover much of Greater London by 2012.
No one expects the new system to be fully driver proof, so finance departments can look forward to the excuses evolving along with the technology.
Today’s ‘I forgot to pay’ is likely to become tomorrow’s ‘I must have left my smart tag in my other car.’
Stay up to date
Visit TFL’s congestion charge web site at www.cclondon.com for full details of the zone; through routes; charging times; payment methods and the fleet scheme.
Never forget
Remind drivers that they can pay the next day if they forget to pay the charge
while they are in the zone. Better still; encourage them to pay online before
setting out.
Register your fleet
Now that the lower limit for fleets is 10 vehicles, it’s less hassle to
register. It costs £10 per vehicle per year but for that you get:
● £7 daily charge per vehicle
● Online account management
● Telephone helpline
● No Penalty Charge Notices (PCNs)
● Option to add ad hoc vehicles
● Direct debit payment
Richard Schooling is commercial director of Alphabet (GB) Limited
