Solving traffic congestion problems will require a broad range of solutions The mobility budget is one of these.
Is there a solution to traffic congestion? Constructing more roads is not the answer, because they will become congested as well before long. How about imposing a toll on freight transport? While this is supposed to reduce the number of lorries on the road, their place will probably be taken by passenger cars. Not only that, but a toll may make delivery vans even more popular than they already are. By 2030, the number of kilometres spent on the road by these vehicles will rise by 43%. The Planning Office estimates that the rise in duty on diesel will do little to combat congestion.
Many experts consider company cars to be one of the main culprits. They believe that the treatment of company cars is far too generous in Belgium. Both the OECD and the European Commission have criticised the tax benefits associated with company cars in our country. "Half the cars on Belgian roads are company cars", people sometimes claim. This is simply not true. The CVO (Corporate Vehicle Observatory) requested the registration figures for the Belgian vehicle fleet from FEBIAC (Belgian Federation of the Car and Two-wheeler Industries):
- Belgium has some 700,000 light commercial vehicles and 930,000 other vehicles (buses, lorries, motorcycles, etc.).
- However, passenger cars actually account for the lion's share of vehicles on the road, at 5.6 million. Of these, 4.48 million belong to private individuals and just 1.12 million to companies and self-employed professionals. It is clear, then, that the latter are not the only culprits when it comes to creating congestion. Abolishing tax benefits for company cars alone will not resolve the issue altogether.
A change of mentality
There is no miracle cure. The solution is like a jigsaw – it has multiple pieces. A change of mentality is required above all else. Perhaps you would like to encourage your employees to choose the most efficient, least polluting and reasonably priced mode of transport for every journey. A mobility budget would make this a possibility in the future. The experts at Arval Belgium, one of the major players in the lease market, are preparing a suitable approach. Els Costers (Sales Director at Arval Belgium):
"The concept is simple. Instead of giving employees a car, parking space, rail pass or rental bike, they receive a mobility budget. This budget enables the employer to set an agreed amount to be spent by the employee on a range of transport options: company car, public transport, bicycle, pool car, etc. The employer specifies the budget size and the means of transport available. The employer and employee also discuss the types of commute that the mobility budget is intended for: commuting to work and professional travel only or private use as well."
Pros
The mobility budget has many advantages for employers:
- You are seen as an attractive employer, because you encourage a flexible working environment and you offer your employees freedom of choice and flexible mobility solutions.
- You meet your CSR targets (corporate social responsibility) by stimulating public transport usage and by reducing the number of cars deployed, kilometres travelled and litres of fuel used.
- You lower your TCM (total cost of mobility), because you have more control over your lease vehicles, increasingly pay for use rather than ownership, and reduce administrative burden.
In turn, your employees have more freedom and flexibility when organising their travel. Last but not least, it also benefits the environment. The then Flemish Mobility Minister Hilde Crevits commissioned the Mobility budget works pilot project in 2012. The project showed that employees with a mobility budget decide more often not to use a car in favour of a different mode of transport. Car usage for journeys between home and work fell by 37% among the five companies that tested this system.
The mobility budget is evidently a fantastic system. So why is it not yet being utilised all over the country? Well, proponents of the system are waiting for a new law to resolve a series of legal stumbling blocks, especially with regard to taxation and social security. The bill has already been drawn up. Els Costers:
"Today, it is impossible for an employer to make all modes of transport available to employees. The legal rules are different for professional, commuter-based and private travel, and they also change depending on the means of transport. This makes the administrative side of things highly complex and time-consuming. The mobility budget intersects all of these rules. The new law needs to resolve this. Once it is passed, things can move quickly."
Ready for the mobility budget? Here are a few simple rules to take on board.
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To implement a mobility budget, an analysis needs to be made of travel habits and the way in which the organisation functions. This analysis enables you to see which combinations are desirable, feasible and profitable.
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Involve social partners when introducing a mobility budget.
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The following combinations are now feasible from a tax perspective:
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company car and tax-free company bicycle
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company car and bicycle allowance
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company car and public transport
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a smaller or electric car for daily usage with a larger family car for holiday periods. In this case, the benefit in kind must be calculated according to usage.
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Focus on maximum flexibility. A package such as Arval Select makes it possible for drivers of lease cars, for example, to use different vehicles depending upon their varying mobility needs.
11.09.2024
Discover our leasing options and get our top deal
Thinking about leasing a company car? Not sure which options are available? Below is an overview of all our available leasing options. That way you can determine which type of leasing is right for you. What's more, our partner Arval has a top deal, valid until 30 November 2024: drive the new electric BMW iX1 eDrive20 or BMW i4 Gran Coupé for a very advantageous all-in price.
Financial or operational leasing?
The same reasoning applies to both financial and operational leasing: you pay a leasing company for a specific period, usually four or five years. In both cases, the leasing company is the legal owner of the car. You do, however, have the option to purchase the car at the end of the contract. In financial leasing, the amount of the purchase option is known from the start of the contract whereas with operational leasing, the amount is determined at the end of the contract based on the car's market value.
'Including services'
This is one of the major advantages of operational leasing versus financial leasing: the taxes, (comprehensive) insurance, maintenance and costs (except fuel) are all included in the rental price. What's more, you enjoy additional services such as summer and winter tyres, roadside assistance and a replacement vehicle. All you need to do is pay a specific amount each month and that's it. In short, you get to drive with peace of mind: everything has been paid for, except for the fuel.
Tax implications?
The purchase option has tax implications: for a financial lease, you depreciate the investment asset and deduct the interest on your tax return. The car is listed as an asset on your balance sheet. For an operational leasing contract, the full rental price is processed as a cost. Tax deduction limits apply in both cases and you may have to take the professional use of the car into account. Equally important: the VAT is paid monthly on the rental price and not in one go, allowing you to use your lines of credit for other investments.
Get our top deal
Our exceptional offer is valid until 30 November 2024: you can lease the new electric BMW iX1 eDrive20 or BMW i4 Gran Coupé under an operational leasing contract at an affordable and exclusive price, including all services.
Arval Belgium SA, Ikaroslaan 99, 1930 Zaventem – RPM Bruxelles – TVA BE 0436.781.102, intermédiaire en assurances à titre accessoire, inscrit auprès de la FSMA sous le numéro 047238 A. Sous réserve d’acceptation de votre demande.
Arval Belgium nv, Ikaroslaan 99, 1930 Zaventem – RPR Brussel – BTW BE 0436.781.102, nevenverzekeringstussenpersoon geregistreerd bij de FSMA onder het nummer 047238 A. Onder voorbehoud van aanvaarding van uw aanvraag.
04.09.2024
Arval: mobility for work and life
Today, many employees see mobility as a need they address with their employer. They have moved beyond relying solely on the private car to get around, instead using a mix of mobility solutions – private, public and mixed. Belgian companies are therefore increasingly looking for expert advice on the perfect mobility mix, adapted to their own professional needs and the needs of their staff. Arval’s mobility specialists show how mobility is evolving and how to handle it accordingly. This not only takes knowledge, but also guidance to support employers in this area.
Philippe Kahn, Mobility Solutions Expert, sums up Arval’s vision and mission: “Life is a journey made of journeys. This means that we at Arval are constantly asking ourselves how we can support and relieve small, medium-sized and large enterprises in all the mobility issues they face. Our DNA as a supporter is built on two key aspects that add value: personal and sustainable mobility*. From individual firms to large companies, Arval offers its corporate know-how and provides a one-stop-shop solution."
* Sustainable mobility: mobility with lower greenhouse gas emissions, which promotes electrification, soft mobility and/or public transport.
Sustainable mobility: a natural progression
Many companies are now fully focused on sustainable mobility or are evolving in this direction. This means not only opting for electric cars, but also looking at new mobility solutions with an open mind. Arval has a role to play in this: all customers are informed and guided in their pursuit of sustainable mobility. For many companies, new mobility solutions such as Arval Bike Lease, Arval Car Sharing and the future budget management tool are key to a balanced mobility strategy.
A big asset in the “war for talent”
Moreover, all these options are not just seen as pure transport options but fit into a Human Resources strategy that companies are deploying in the “war for talent”. Philippe Kahn is increasingly dealing with companies that prioritise mobility solutions. They see it as an opportunity to strengthen the bond with their employees or to attract new ones.
Kahn explains: "Many companies think about their location in terms of mobility. For example, they prefer the proximity to a mobility hub, such as a major railway station like Brussels-Central or Antwerp-Berchem. This allows them to offer their employees the full mix of mobility options, including coming to work by bike or scooter, traveling by pool car or train, using buses and shared cars, and more. And they can pay for all this with the mobility budget they receive from their employer."
Added value: business and personal
Arval’s budget management tool provides companies with a comprehensive overview of all their employees’ used mobility solutions and the associated costs. This is just one aspect of the added value companies get. Mobility consulting is also an integral part of what Arval offers.
Kahn: "If a company of around 100 employees plans to move to the centre of Antwerp, we sit down with them to see what new mobility solutions they'll need and how much it will all cost. This way, we're truly part of the team and together we look at the effects of all possible mobility solutions on their future. This is customisation, where we put our expertise at the service of our customers."
This expertise often leads companies to take a step forward in their business management and to better support their staff."
Kahn continues: "The days of using an Excel file to keep track of pool car usage are over. Apps on phones or computers make everything easier and smoother. They keep track of the location of pool cars between the various branches and blur the line between pool and shared cars. For example, employees can use a car privately during the weekend – albeit for a fee – and for business travel during the week. Support for leasing an electric bicycle is also included. Arval relieves employers and gives them extra assets to support their employees in their private mobility too. Through their mobility offerings, companies can support their employees' daily lives, both in and out of the office.”
Arval Belgium SA/NV – Ikaroslaan 99, 1930 Zaventem – Brussels Register of Companies – VAT BE 0436.781.102, secondary insurance mediation, FSMA no. 047238 A. Subject to acceptance of your application.
12.06.2024
We need to move forward together
Since 2019, the bank has reduced its CO2 emissions per full-time equivalent by 55%. And according to Sandra Wilikens, Chief Human Resources Officer, everyone must play their part.
Between 2019 and 2022, the bank succeeded in reducing its CO2 emissions by 55%. So how did you do this?
"Mainly by focusing on the energy efficiency of our buildings, which account for approximately 80% of our immediate emissions. We also optimised our real estate and significantly reduced business travel. We settled on a structured approach involving all departments. Since 2012, our Green Bank Platform has gathered the contact persons of each department every quarter, allowing them to present an action plan with their initiatives. They then develop a series of KPIs on energy and paper consumption, business travel, the electrification of the vehicle fleet, waste management, etc. Because measuring is knowing."
The target was to achieve a 42.5% reduction in emissions compared to 2012 by the end of 2025. A goal we have since achieved. What else is in the pipeline?
"We have no intention of resting on our laurels until 2025. Because there is no time to waste if we want to be carbon neutral by 2050. Our new headquarters at Montagne du Parc in Brussels is a good example of energy efficiency, but there is still a room for improvement in the rest of our real estate. We will improve the energy efficiency of the various regional offices, install solar panels in more than 80 branches, and LED lighting will become standard in all our buildings. These efforts must allow us to reduce our CO2 emissions by another 7%."
How much progress have you made in terms of the electrification of your fleet?
"We are making a sustained effort to electrify our fleet, and I think we are on the right track. At the end of 2022, just under 30% of our fleet of leased company cars was electric – 100% electric and plug-in hybrids. In the third quarter of 2023, these cars accounted for 95% of new orders. This was largely due to the new car taxation. But for employers, it doesn't stop there. They must deal with a complex tax framework, including the reimbursement of electricity costs. Some of our staff members also face obstacles, for example, because they have difficulty accessing a charging station. I intend to organise a mobility roundtable this year. The aim is to bring governments, operators, start-ups and companies together. Because we have to move forward and are all in this together."
How do you ensure sufficient employee engagement?
"With a lot of communication. You need to explain what you are doing and why. That is the only way to get people to cooperate. We have a network of more than 200 EcoCoaches within the bank. The sustainability compartment of CBA 90 also inspires. We set six specific objectives each year. If we achieve at least three, all staff members receive a bonus at the end of the year. To date, this has been a success. We also have other incentives. With our “Green Fuel Consumer Plan”, we reward staff members who have a company car but use it sparingly. We are also launching many campaigns to promote soft mobility, such as walking, cycling and public transport. The decision to base our offices in cities is also positive. At the end of 2022, 79% of the employees working in Brussels used public transport to get to work. Outside cities, 60% of employees do this."
Finally, can you think of any issues that need to be addressed urgently?
"Digital pollution is often underestimated. To give you an idea: sending 100 mails emits just as much CO2 as driving twenty kilometres. That’s why we organise an internal campaign every year to raise awareness among our staff members and give them tips on how to reduce their digital footprint. Regularly cleaning up your mailbox, sending links instead of files, deleting outdated files: all little things. But if our 11,000 colleagues do this daily, we can make a big impact. Every effort counts!"
08.03.2024
Businesses stand to benefit from switching to electric and multimodal mobility
BNP Paribas Fortis is ready for the mobility of tomorrow. And Laurent Loncke, General Manager Retail Banking and member of the bank’s management committee confirms this when he says “We do much more than lease electric vehicles”.
How can companies leverage mobility as part of their transition?
"If we look at vehicle usage alone, switching from fossil fuels to electric energy can reduce CO2 emissions by a factor of four. This transition is being encouraged in our country more than ever by tax incentives and tax breaks. From 2035, the European Union will also ban the sale of cars with combustion engines. Whether it’s for the company fleet or company cars for employees, electric driving is the way forward, alongside other forms of mobility."
Are all businesses aware of this?
"These days, two out of every three new vehicles are company cars. And 80% of those orders are electric vehicles, a trend that is also apparent at our partner Arval."
So companies are playing a pioneering role in this transition?
"Certainly. First and foremost because former company cars find their way to the second-hand market at some point, making electric driving more accessible for everyone. Secondly, by choosing an electric car, you can encourage your friends and family to follow your example. Our recent Profacts survey (only in Dutch and French) showed that 85% of electric vehicle owners are satisfied to very satisfied that they switched to an electric vehicle. However, 42% of Belgians are still reluctant. Half of them are worried their battery will run out before they can get to a charging point."
Is their fear justified?
"Not really. Most drivers only feel comfortable with a range of 500 kilometres, even if they only drive a few dozen kilometres a day. It’s true the charging network does need to be developed further. Many people, especially those living in cities, cannot install a charging point at home. BNP Paribas Fortis is contributing to the expansion of the charging network through its participation in Optimile. This Ghent scale-up offers software solutions for charging electric cars and is developing strategic partnerships for the installation and maintenance of charging points."
Can an electric car be part of each employee’s remuneration package?
"Today, there are already less expensive vehicles on the market, making electric driving an option for middle and lower-management. The Total Cost of Ownership of an electric car is the most important factor, however. And this is still much lower than that of a vehicle with a combustion engine. Leasing is often the best solution. We have a comprehensive, tailor-made offering for all companies, regardless of their size and needs."
What exactly do you mean by a 'comprehensive offering'?
“In addition to leasing, we are able to offer charging solutions at home or at work, a charging card for public networks, the automatic reimbursement of electricity consumption at home, an app to find charging stations, and electric driving training through our many partners.”
So a complete ecosystem?
"We want to contribute to the mobility of tomorrow. By financing it, through credits or leasing, and with insurance, but also by working with partners outside our traditional activities. Like Optimile, and Touring, an organisation that is synonymous with reliability."
But mobility isn't just about cars, is it?
"We believe we need to rethink our relationship with the car. Given the climate targets and the increasing scarcity of resources, it is simply not possible to replace every internal combustion engine with an electric car at the moment. Arval offers its extensive expertise to companies considering a different approach to mobility. We help them analyse their needs, propose alternatives to the car, establish a mobility budget or draw up a mobility policy. We offer bicycle leasing, sometimes in combination with car leasing. We strongly believe in multimodality and mobility-as-a-service solutions: the option to combine different transport modes and pay for them without too much hassle. This is also one of the specialities of our partner Optimile."
Are companies and their employees open to this idea?
"The idea of employees no longer saying 'I have this amount for my car in my salary package', but rather 'I have this amount for my mobility' is gaining traction. People are already paying for use rather than ownership in gyms or for streaming services. Mobility is going down the same route, with car-sharing and flat-rate subscriptions, making costs more predictable for businesses and private individuals. But the pace of change will also depend on the success of the federal mobility budget. For now, uptake is slow."