Recently, we discussed the changes to the Autumn Statement released a few weeks ago and the impact they would have on motorists. In today’s article, the Yes Lease team explore the changes affecting fleets and the automotive industry in general.
Support for ultra-low emission vehicles (ULEV)
Chancellor George Osborne announced an additional £600 million to boost sales of ultra-low emission vehicles (ULEV), which the Government believes will save 65 million tonnes of carbon and improve air quality.
The £600 million will go toward funding the manufacturing and marketing of ULEVs. The funds will be made available between now and 2021.
A target has been set for 25% of European vehicles to be built in the UK. At the recent Paris COP21 conference on climate change, the Government reaffirmed the UK’s pledge for the majority of cars and vans to reach zero emission levels by 2050.
Benefit in Kind levy
Possibly the biggest news for fleets was the announcement of a delay in removing the current diesel surcharge on Benefit in Kind car tax. Originally set to be dropped in April 2016, the levy will now end in April 2021.
The Government believes that by then, EU-wide testing procedures will be in place to ensure that diesel vehicles comply with air quality standards under both lab and real-world conditions.
The five-year extension in the surcharge removal has been estimated to raise £1.36 billion in revenue.
There was no mention of changes to fuel duty in the Autumn Statement. However, the Treasury has confirmed that fuel duty will remain frozen at 57.95 ppl on petrol and diesel until 31 March 2016, after which it will increase with the Retail Prices Index (RPI).
The Autumn Statement highlighted government concerns about the increase in salary sacrifice arrangements, and is considering if any action should be taken. Further evidence, including from employers, will be gathered.
Salary sacrifice schemes are a key component of an employee benefits package, and can be an essential tool for businesses to attract and retain talent. As such, it is crucial for the Government to recognise the importance of companies offering staff fully maintained and insured vehicles.
Transport and infrastructure
The Department for Transport suffered the biggest budget cut of any government department, with its operational budget reduced by 37% and set to decrease by £1.8 billion by 2020.
However, capital investment in Britain’s transport network would rise by 50% to £61 billion. This includes £5 billion for road maintenance, a national pothole fund of £250 million across the next five years, and £15 billion in resurfacing more than 80% of the Strategic Road Network.
Down south of the country, London will receive £11 billion for Crossrail and a network of Cycle Superhighways, plus upgrades for London Underground and buses. A further £250 million will also be spent on a lorry park in Kent to reduce pressure on local roads during Operation Stack.