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Budget 2012: what you need to know

By / 9 years ago / Latest News / No Comments
(See our separate story here) In addition, Budget 2012 announces changes to the capital allowance regime for business cars to strengthen the environmental incentive for businesses to purchase fuel efficient cars.

Capital allowances: business cars first-year allowances (FYAs) – From April 2013, the Government will extend the 100% FYA for businesses purchasing low emissions cars for a further two years to 31 March 2015. 

The carbon dioxide emissions threshold below which cars are eligible for the FYA will also be reduced from 110 grams/kilometre to 95 grams/kilometre, and leased business cars will no longer be eligible for the FYA.

Capital allowances: business cars main rate – From April 2013, the carbon dioxide emissions threshold for the main rate of capital allowances for business cars will reduce from 160 grams/kilometre to 130 grams/kilometre. The threshold above which the lease rental restriction applies will also reduce from 160 grams/kilometre to 130 grams/kilometre.

Vehicle excise duty (VED) rates will increase in line with the Retail Price Index (RPI) only from April 2012.

The Government will consider whether to reform VED over the medium term, to ensure that all motorists continue to make a fair contribution to the sustainability of the public finances, and to reflect continuing improvements in vehicle fuel efficiency. 

In addition, the Government aims to develop a direct debit system to allow motorists to spread their VED payments. The Government will seek the views of motoring groups on these measures. 

VED: additional days on initial nil rate vehicle licences – The Government will 

reduce the administrative burdens on car leasing businesses by extending the date-to-end-month scheme to VED exempt licences.

Car fuel benefit charge (FBC) 2012–13 and 2013–14 – From 6 April 2012, the FBC multiplier for cars will increase from £18,800 to £20,200, and will increase by 2 per cent above the RPI in 2013-14. The Government commits to pre-announcing the FBC multiplier one year ahead. 

Van FBC 2012–13 and 2013–14 – From 6 April 2012, the van FBC multiplier will be frozen at £550, and will increase by the RPI in 2013–14. The Government commits to pre-announcing the FBC multiplier one year ahead.

For analysis and opinion of the Budget, see this week’s FWC special, out on Friday

 

 

 

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Steve Moody

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