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2013 Budget: Indepth reaction from LeasePlan UK

First-year allowances

‘Extending the 100% first year allowance on low-emissions vehicles to 2018 is also a welcome move that will continue to encourage drivers to buy green vehicles. However, the removal of these allowances for leasing companies will continue to slow down adoption into fleets, a key audience that could help transform the UK’s vehicle landscape.

‘While the emissions threshold will be lowered in April 2015 from 95g/km to 75g/km, this will act as a further incentive for manufacturers to develop ever more efficient vehicles, which should in turn mean that drivers continue to have a strong selection of vehicles to choose from in this threshold.’

 

Company Car Tax

‘It comes as no surprise to the industry to see the CO2 lever being “tweaked” again. The Government has had a change of heart in relation to the significant ratcheting-up of the CO2 “escalator” effect, which had previously been planned for 2015-16 tax year. Now, the shock of last year’s Budget related to ultra low emission vehicles has been softened with the introduction of three new bands from 2015-16 to incentivise the choice of low-emission derivatives.

‘Nonetheless, costs relating to company car tax are still increasing for employer and employee. This makes it all the more important for fleet managers to adopt a whole-life costs perspective when planning their fleet, that takes into account all costs over the full contract lifecycle.’

 

·         0-50gkm – 5% (2015-16), 7% (2016-17), 9% (2017-18), 11% (2018-19)

·         51-75gkm -9% (2015-16), 11% (2016-17), 12% (2017-18), 13% (2018-19)

·         76-94gkm – 13% (2015-16), 15% (2016-17), 15% (2017-18), 15% (2018-19)

 

Fuel Duty

‘Cancelling September’s planned fuel duty hike is welcome news for drivers alongside the continuing commitment to scrap the fuel duty escalator. UK fuel prices are already among the highest in the world, and a major cost for corporate fleets. This decision will help ease the burden for UK motorists, delivering an average annual saving of around £65 per vehicle from September, when the price hike was due to start. For companies running sizeable fleets, that adds up to a meaningful saving.’

 

Infrastructure investment

‘The Chancellor’s extra £3bn annual infrastructure spend will help deliver much-needed road improvements. Keeping Britain moving is vital to keep the economy growing. However, starting this investment from 2015/16 does not help today’s drivers, who face congestion and delays, hampering business mobility and efficiency. We urge the Government to move quickly to deliver road upgrades around the country.’

 

Incentives for manufacturing ultra low carbon vehicles

‘The Chancellor’s decision to apply tax incentives for the manufacture of ultra low emitting vehicles will deliver greater choice for business drivers. This decision signifies a return to the sensible policy of incentivising environmentally friendly vehicles. Zero-carbon vehicles should still be the industry’s aim, but this will require a long-term commitment in charging infrastructure.’

 

Corporation tax

‘Support for British business is critical in this challenging economy, and companies will benefit from the further 1% cut in corporation tax, creating a single tax rate for all businesses.’

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.