CHANCELLOR Rishi Sunak delivered a Budget that put zero emission fleet drivers at its centre as it drives towards its zero emission goal.
Included in the Chancellor’s statement was further clarification on company car tax plus and extension of the Plug-in Car Grant.
However, the grant has been reduced to £3000 and now excludes vehicles over £50,000.
The government says that it is intended to encourage more people to switch over a longer period to zero emission motoring.
Caroline Sandall, chairman of the fleet managers organisation ACFO, commented on Budget 2020:
“Fleet decision-makers and company car drivers will be applauding one of the most up-beat Budgets for the industry for many years.
“The hugely welcome, but surprising, freeze in company car benefit-in-kind tax rates for 2023/24 and 2024/25 at 2022/23 levels could provide a significant boost in demand for what remains one of the nation’s favourite employee benefits.
“Company car demand has been hit in recent years by year-on-year increases in benefit-in-kind tax and long-term rate uncertainty. However, the fact that rates are now known for the next five financial years – a full vehicle replacement cycle – gives planning confidence to both fleet decision-makers and company car drivers.
“Businesses and drivers have also been opting out of company cars because tax rates were not known for the full duration of the operating cycle. ACFO has continually called on the Government to recognise that fleets now operate company cars over typically four and five years.
“It seems that HM Treasury has listened to ACFO’s voice and not only is the five-year notification hugely welcome, but so is the freezing of rates in the final two years – for one of the first occasions in living memory.
“Overall, in almost 30 years working in the fleet industry, Budget 2020 has delivered the most welcome news to the sector that I can remember.
“The Government has pledged to end the sale of new petrol, diesel and plug-in hybrid vehicles by 2040 and in all likelihood earlier, perhaps 2035 or even 2032. Therefore, it is imperative that fleet decision-makers and company car drivers focus on moving towards operating and driving 100% electric vehicles.
“Extension of the Plug-In Car Grant will aid that move as will the tweak to capital allowances. However, ACFO awaits with interest to see the fine detail of exactly how the £500 million available over the next five years to support the roll-out of a fast-charging network for electric vehicles, ensuring that drivers will never be further than 30 miles from a rapid charging station, will be spent.
“Added to the continuation of the freeze in fuel duty and hundreds of millions of pounds to be spent on improving the road network and filling in potholes, Budget 2020 will, ACFO believes, go down in history as one of the best for the fleet industry in recent years.”