Company Car Today

Chancellor Rishi Sunak’s 2021 Autumn Budget and Spending Review was lacking in major announcements to affect the business car marketplace, with the sector disappointed in what was described as a “missed opportunity” to provide a clear view of future policy.

The fleet industry was frustrated with the lack of mention of issues including future BiK beyond the previously announced rates that run to April 2025, or the likes of road pricing, future VED for cars or vans or a ZEV mandate.

“The Chancellor has missed an opportunity to give the industry essential clarity when it is most needed,” said BVRLA chief executive Gerry Keaney. “At a time when the uptake of electric vehicles is ready to accelerate, the silence around areas such as benefit in kind tax rates is deafening. This only grows fears that rates will be drastically increased down the line.”

“BVRLA members had clear asks for this Budget. The Chancellor has failed to give tangible details on these asks, meaning that questions remain over what the Government’s plan is,” continued Keaney. “The Net Zero Strategy last week marks a very positive step in the right direction; what we needed in today’s Budget was more detail. Instead, we have been given headlines that offer no clarity, no foresight and no confidence.”

The Association of Fleet Professionals also expressed disappointment. “The biggest of these is the absence of benefit-in-kind taxation tables for 2025-26, for which we’ve been campaigning and remain an issue for fleets embarking on electrification,” said AFP chair Paul Hollick. “We would also have welcomed any sign of future discussion on the Government’s future thinking on road pricing, but it appears that conversation remains some way into the future.”

“This Budget has left the fleet industry with more questions than answers,” added Leaseplan UK head of consultancy services and customer value Matt Walters. “If the fleet industry is to prepare for the future, then it needs some of these unresolved questions answering as soon as possible.”

Walters also called for the chancellor to announce future BiK tax rates in the spring Budget statement next year.

“Today’s Budget did not give us the rates for 2025-26 or beyond,” he said. “This isn’t yet an urgent concern. But we would urge the Chancellor to continue his record of transparency – and provide those rates as soon as possible, so that fleets entering into contracts today are able to plan properly for the future.”

Fuel Duty

The freezing of fuel duty was one of the biggest announcements affecting the corporate sector, with Sunak (pictured above) announcing the twelfth consecutive year of freezing duty, which it claimed would save the average car driver £1900 per year versus the pre-2010 escalator. But The AA pointed out that versus pre-pandemic prices, fuel now costs 21p per litre more thanks to recent hikes, which includes an additional 3.5p per litre in VAT, which is more than the 2.84p that would have been added with the fuel duty increase. “The Chancellor is still taking more tax from drivers,” said the motoring organisation.

Annual increases

As is normally the case, the Budget documents detail increases in motoring taxes, which include a RPI-linked ride in car, van and motorcycle VED from 1 April 2022, as well as CPI-related rises to car fuel benefit, van benefit and van fuel benefit from 6 April 2022.

Infrastructure

The Budget also brought the promise of a £2.7bn pot for the next three years to address road maintenance across potholes, bridge repairs and road resurfacing in areas not receiving City Region Settlements.

Also mentioned is a £2.6bn fund for 50 local road upgrades by 2025, including the A509 Isham Bypass, A259 in Bognor Regis and A350 Chippenham Bypass, all of which will, according to the Treasury, “progress to the next stage of development”.

A further £355m of funding has also been confirmed for zero emission buses in areas including Warrington, Leicester, Milton Keynes, Kent and Cambridgeshire & Peterborough.

Heavy Goods Vehicles

There were a series of measures announced to attempt to help the beleaguered HGV sector, with the chancellor pledging £32.5m in roadside facilities for HGV drivers, new “skills bootcamps” to train an additional 5000 drivers, increasing the number of HGV driving tests available by up to 50,000 per year freezing HGV Vehicle Excise Duty and suspending the HGV road user levy for another 12 months from August 2022.

Flight tax

A surprise in the Budget was a small boost to the cost of short-haul flights with a new band of Air Passenger Duty covering trips within the United Kingdom at £6.50, compared with short-haul international costing £13, £87 for long-haul and £91 for ultra-long haul – travel to destinations with capitals more than 5500 miles from London.

“Right now, people pay more for return flights within and between the four nations of the United Kingdom than they do when flying home from abroad,” said Sunak, who claimed the new rate will “bring people together and boost regional airports such as Aberdeen, Belfast, Inverness and Southampton.