Expert Blog

Autumn Statement 2016: Response

20161123_Autumn statement 2016 response

The Chancellor of the Exchequer, Philip Hammond, today delivered his first Autumn Statement. Jon Lawes, Managing Director of Hitachi Capital Vehicle Solutions, responds.

“The Autumn Statement is always important for the fleet industry, but this year it was more important than usual. We have finally been told what the Government will do with Salary Sacrifice schemes – and the results are more encouraging than the original plans floated in August.

“Philip Hammond has decided to impose Income Tax and employer’s National Insurance only on cars procured after April 2017. Workers benefiting from such schemes today will continue to do so until 2021. This is a sensible compromise.

“We are also glad that the Chancellor has exempted ultra-low emission vehicles from these changes. ULEVs are an increasingly popular choice for many motorists. Now there will be even more reason to go green.

“However, the changes for other cars bought through Salary Sacrifice after April 2017 fail to take account of the extraordinary benefits such schemes offer. They are good for workers, employers, the wider economy and our shared environment. They should be encouraged, not penalised.

“Elsewhere, Hammond has been generous to motorists – within the constraints of tough economic conditions. He is wise to supplement his predecessor’s investment in Britain’s road network with an extra £1.3 billion, as well as to provide an extra £390 million to help develop the electric, autonomous and connected cars of the future.

“Freezing the rate of Fuel Duty at 57.95 pence per litre is a policy we have grown used to since 2011 – but it is still a welcome one. With all the other pressures on their wallets, motorists deserve some relief.”

“Given the economic uncertainty ahead, and its impact on the public finances, we weren’t sure what to expect from Philip Hammond’s first Autumn Statement – but he still gave us some cause for cheer, with Fuel Duty frozen, more investment in Britain’s roads and a compromise over Salary Sacrifice.”

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