This week’s round-up of fleet news focuses on the business response to fuel duty and low-emissions and other tax changes in the UK Budget submitted by Chancellor of the Exchequer George Osborne, plus John Lewis’ appointment at Leaseurope.
While many companies welcomed the scrapping of fuel duty and amendment to corporation tax, there was a dichotomy in opinion over tax changes to promote greener motoring.
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General comments
David Wallace, sales and business development director at epyx: "Last year’s Budget contained a couple of surprises for fleets, especially the 130g/km Capital Allowances change, but there was nothing quite as significant to report this time around with the minor exception of the fuel duty freeze and the new 50g/km and 51-75g/km CO2 benefit in kind tax bands, which will only be relevant if more cars become available that can meet these targets. The major fleets with which we work will continue to concentrate, above all else, on driving down the costs of servicing, maintenance and repair in order to minimise the expense of business transport in difficult economic conditions. There is nothing in the Budget that will change that strategic approach."
David Brennan, managing director of LeasePlan UK: "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, hamper business mobility and efficiency. We urge the Government to move quickly to deliver road upgrades around the country."
Fuel duty
David Brennan: "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 3.02p per litre price hike was due to start. For companies running sizeable fleets, it adds up to a meaningful saving."
John Lewis, chief executive of the British Vehicle Rental and Leasing Association: "This is almost becoming a no-brainer. With the economy flirting with recession and household incomes still falling in relation to inflation, the government just cannot afford to price businesses and households off the road."
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By GlobalDataGeoff Dunning, chief executive of the Road Haulage Association (RHA): "We urged a ‘no increase’ announcement and the Chancellor delivered – although we would have liked him to go further by cutting diesel duty. This is another massive achievement for the road haulage industry and the FairFuelUK campaign, which the RHA co-founded three years ago. We have transformed the debate around fuel taxes.
"The RHA also has a strong message for hauliers’ customers. Diesel prices have been rising sharply this year and, according to the RHA’s weekly fuel price survey, already stand at 115.14p per litre (excluding VAT). Customers have to accept that their haulage charges must rise if they are to continue to receive the services upon which they depend."
Low-emissions
John Lewis: "Thousands of businesses, particularly SME’s, rely on leasing to acquire their cars, in many cases because they can’t raise the finance elsewhere. This decision to remove 100% First-Year Allowances won’t stop them leasing, but it will result in them choosing cheaper cars with higher CO2 emissions. In effect, the government is hindering the momentum towards greener motoring. We think overall car emissions in the UK could rise as a result over the next year.
"The government’s decision to rethink the benefit-in-kind thresholds on low-emission company cars will make them a more attractive proposition to drivers, but there is no point doing that if companies don’t offer staff these vehicles in the first place.
"We believe that this move unfairly discriminates against the leasing industry and breaks European Commission rules on low-carbon incentives."
Andy Cullwick, head of marketing at Manheim Remarketing: "In terms of company cars and vans, the benefits for ultra-low emission vehicles are changing with new tax bands being introduced. We welcome the emphasis on greener travel and the commitment going forward to make announcements up to three years in advance so that businesses may better plan for the most effective fleet mix. The drive for greener vehicles and the reductions in certain taxes should support growth over the coming years, as businesses look to renew their fleets. The investment in the fleet renewal cycle can only be good for the motor trade and the remarketing industry."
David Brennan: "The Chancellor’s decision to apply tax incentives for manufacturing 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 changing infrastructure.
Jon Pollock, corporate sales director, Nissan: "Nissan is delighted that Benefit In Kind tax levels on Electric Vehicles (EVs) from April 2015 will be 5% of its P11D price in 2015/16 rather than 13% as previously announced.
"The Budget announcement means that by keeping BIK rates for company EV drivers at the lowest rate, more will look to choose an EV like the LEAF as their next company car. This should increase EV sales, at the same time as helping bring down emission levels which is a priority both for companies meeting their corporate CSR objectives and for cities such as London to meet future EU emission targets.
"It will also help encourage companies to add the LEAF to car choice lists again as they can plan their company car strategy in the knowledge their drivers won’t take delivery of an EV and then immediately receive a massive hike in their personal BIK tax rates after April 2015."
Other tax changes
Andy Cullwick: "The planned changes in corporate and employment taxation seem to be, in the first instance, positive for the many SME dealerships throughout the UK. The motor trade is an industry which encompasses many types of business and it is important that there is confidence in the marketplace going forward to allow employment and investment decisions to be made. It remains to be seen how the proposed changes announced in today’s Budget will be rolled out in practical terms for the industry."
David Brennan: "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."
John Lewis: "Unfortunately the grey fleet remains a grey area for this government. The government actively promotes greener road transport through the VED and company car tax regimes, while incentivising staff to drive extra work miles in their own gas-guzzlers. This is a glaring blind spot in an otherwise environmentally-focused tax regime."
Lewis to join Leaseurope
As well as commenting on this year’s Budget, Lewis, who is set to leave the BVRLA in June 2013, has joined Leaseurope as chair of its Automotive Steering Group (ASG), responsible for lobbying on EU regulatory motor industry issues. He replaces Vincent Rupied, senior relationship manager for the automotive sector at BNP Paribas Personal Finance.
richard.brown@timetric.com
