The Chancellor of the Exchequer today delivered his Autumn Budget. Jon Lawes, Managing Director of Hitachi Capital Vehicle Solutions, responds.
Right from the opening of his speech, the Chancellor framed the Autumn Budget in terms of ‘challenges’ and ‘opportunities’. First came the challenge of Britain’s ongoing negotiations with the European Union. Then came the opportunity of a ‘technological revolution’ in which Britain can play a leading role.
This dichotomy also applies for fleets and motorists. The greatest challenge in the Budget came in the form of higher diesel taxes. As of 1 April 2018, new diesel cars will be pushed into higher Vehicle Excise Duty bands. As of 6 April 2018, the diesel supplement applied to Company Car Tax (CCT) will be raised from 3% to 4%. Alongside other clean air measures that have been announced in recent months, these tax hikes make it even more important for organisations to review their fleet policies.
Another challenge is CCT in general. Although Philip Hammond announced the increased diesel supplement, he didn’t actually announce the main rates of CCT for 2021-22. This means that we now only have rates for the next three-and-a-half years, so employees entering into four-year leases don’t yet know the rates for the entire duration. It’ll be good to get some clarity on this over the coming weeks.
There were opportunities elsewhere in the Budget. For instance, the Chancellor is looking towards the future with his support for driverless cars.
However, as he put it himself, ‘our future vehicles will be driverless, but they’ll be electric first – and that’s a change that needs to come as soon as possible.’ Much like Hitachi Capital Vehicle Solutions, the Chancellor clearly recognises the potential of electric vehicles. He has stumped up an extra £200 million for investing in the country’s charging network, which he wants private companies to match. He has found £100 million to extend the lifespan of the Plug-In Car Grant to 2020. And he’s also confirmed that employees charging their vehicles at work will not face benefit-in-kind tax on the electricity they use. This is all encouraging news for fleets that want to go green.
But the Chancellor isn’t neglecting traditionally-fuelled motorists. He made it clear that his diesel tax hikes won’t affect van drivers. He also confirmed that the rate of Fuel Duty for diesel and petrol vehicles will be frozen 57.95 pence per litre for yet another year, until April 2019.
Now that we’ve had the Budget, the fleet industry will be turning its attention to the clean air policies that are coming from both national and local governments. As always, Hitachi Capital Vehicle Solutions will help its customers to meet the challenges and enjoy the opportunities that are yet to come.