Key figures from the fleet and company car marketplace deliver their responses to the chancellor Philip Hammond’s 2018 Budget statement, including comments from the BVRLA, Lex Autolease, the SMMT, TMC and Leaseplan.
Gerry Keaney, chief executive, British Vehicle Rental and Leasing Association
“It is vital that fleets and company car drivers are able to plan for the future, confident that they are working with more accurate emissions information and a fairer tax regime that rewards those who choose cleaner vehicles. These revised tax bandings can’t come too soon.
On CO2-based van VED
The decision to postpone a CO2 based Van VED regime is great news for fleets. Tax incentives can be a very powerful tool in driving businesses to use cleaner vehicles, but it is no use having these until we have enough low-emission van options on the market. The BVRLA is pleased that the Government has listened to its feedback on this issue and decided to take a pragmatic, business friendly approach to greening the van fleet.
On not bringing forward the 2% EV BIK banding coming in April 2020
The Chancellor chose to ignore the overwhelming voice of fleets, motoring groups, business organisations, environmental groups and MPs – all of whom were united in calling for this simple tax measure to support the electric vehicle market.
The Government has missed a golden opportunity to incentivise the most important market for electric cars and is in danger of undermining its own Road to Zero strategy.”
Matt Dyer, managing director, Leaeseplan
“What is it going to take for the Chancellor to reveal the rates of Company Car Tax for 2021-22 and 2022-23? We used to know these rates for the next five years, but now the Government seems determined to keep fleets and motorists in the dark. This is terrible for businesses who are trying to plan for the future, particularly at a time when there is already so much uncertainty. Philip Hammond must rectify this as soon as possible – preferably in the forthcoming Finance Bill.
The transition to WLTP data for tax purposes could be costly for some drivers. Even the interim ‘NEDC-correlated’ data, which is currently being used, could raise emissions figures and push some vehicles into higher tax brackets. That’s why we’ve been calling on the Chancellor to help out – and, with his announcement of a review into the effect of WLTP on motoring taxes, it seems as though he may be listening. We now wait until spring to see whether he is really going to deliver on this promise.
After Theresa May mentioned it in her party conference speech, the Fuel Duty freeze was no surprise – but it was still good to hear it confirmed in the Chancellor’s own speech today. However, even with the ongoing freeze, petrol and diesel prices have still risen significantly over the past few years. Perhaps, for his next Budget, the Chancellor might consider cutting Fuel Duty for the first time since 2011.”
John Webb, Principal Consultant at Lex Autolease
“The lack of long-term BiK tables is a key factor that’s holding the market back. Before fleet decision makers can build a strategy based around the average 48-month contract, and before employees can commit to what is essentially a four-year investment, they need assurance that the associated costs are not going to increase over its lifetime.
There has been a lot of noise about the increased availability of WLTP data causing indecision, but until fleets and drivers understand how it will impact BiK taxation and ultimately affect their finances, it is of little value to them. Orders for diesel vehicles are being delayed in case any further tax increases are announced which could make them prohibitively expensive. Equally, the question over whether tax incentives will be maintained for electric vehicles will determine whether and when the immediate investment in an Ultra Low Emission Vehicle fleet will pay off.”
Mike Hawes, Chief Executive, SMMT
“There are some welcome announcements in the Budget, including further funding for the industrial strategy, in particular the Stephenson Challenge and investment into infrastructure. Amid continuing Brexit uncertainty, however, the automotive industry was looking for a stimulus to boost a flagging new car market. We wanted to see more incentives for consumers to purchase the latest, most environmentally friendly vehicles.
“The forthcoming review into the impact of WLTP on Vehicle Excise Duty and company car tax must, therefore, ensure that motorists buying the latest, cleanest cars are not unfairly penalised. Industry looks forward to working closely with government on this review to ensure we encourage the newest, cleanest vehicles on to our roads rather than incentivising consumers and businesses to keep older vehicles going longer.”
Neil Parish, Chair of the Environment, Food, and Rural Affairs Select Committee
“By not bringing forward the 2% Company Car Tax rate for zero-emitting vehicles by one year the Government has signalled that transitioning to cleaner and greener vehicles is not a priority.
This is a disappointing decision and will discourage company car drivers from choosing an electric vehicle until April 2020.
Building on the strong cross-party support for this policy, I’ll continue campaigning to change the Government’s mind and will be exploring opportunities to amend the Finance Bill to introduce this.”
Paul Hollick, managing director, TMC
“As if anyone needed reminding what a disaster WLTP has proved to be, the chaos has now bitten the Budget. I’m pleased to see the Treasury will review the impact of WLTP on company car tax (CCT) and VED. But since it would be illogical to announce BIK rates for 2021/22 until after the review, it means there’s no hope of clarity until next Spring at the earliest.
“Sadly, I predicted this at my last seminar and this now means that any employee choosing a company car now is still taking a gamble on how much tax they pay in year three. That’s bad news all round, not only for the fleet industry and its customers but also for the government’s low carbon transport plans, if employees opt out of company cars into older vehicles. The Treasury and HMRC really have to get a firm grip on CCT before Brexit overwhelms them.”
Nigel Morris, employment tax director, MHA MacIntyre Hudson
“It’s a shame the Government hasn’t taken the opportunity to recognise what their own Ministers understand – that newer diesel cars are much less polluting than older ones were. This move goes nowhere to provide relief to drivers who remain in diesel cars until viable alternatively fuelled vehicles (AFVs) come to market”
Richard Hipkiss, Managing Director, Fleet Operations
“The Chancellor’s decision to delay a government review of the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) will come as a major blow to the fleet sector. The lack of insight into tax liabilities from April 2021 continues. Strategic long-term planning remains difficult with the lack of clarity set to continue stymying procurement decisions for many fleet operators.”