BVRLA BUDGET REACTION
Commenting on today’s Budget, BVRLA chief executive John Lewis said:
“This is clearly a Budget for business and employment that is likely to stimulate growth for many of the fleet industry’s customers.
“However, the Chancellor’s enthusiastic efforts to drive down emissions-based capital allowances for company cars could be a step too far, too soon.
“The fleet sector is the only part of the new vehicle market that is still growing at the moment. It will adapt to the new tax regime as it always does, but these ambitious targets could bring a temporary stall to the market as businesses re-evaluate their fleet policies.”
Mr Lewis had this to say on some of the Chancellor’s specific measures:
On fuel “The Chancellor has missed an open goal by deciding not to cut fuel duty. We will see public outrage at fuel prices continue to rise ahead of the scheduled August duty increase.”
“Buying fuel to get to work or deliver your company’s products and services is not a discretionary spend. To continue to ratchet up fuel duty as if it is a pernicious luxury like alcohol or tobacco is misguided and cynical.”
On electric vehicles “We have already seen that the market for electric cars has got off to a slow start. By eliminating their company car tax exemption from April 2015, the Chancellor is getting rid of one of the main incentives for fleets to operate them. This measure could kill the electric car market stone dead.”
“The only way out is for manufacturers to slash their prices, which they have so far refused to do.”
On VED “The continued freeze in VED for all commercial vehicles over 3.5 tonnes will be a welcome boost for CV operators, but it is unlikely to compensate for the lack of compassion shown over fuel duty.”
On company car taxes “The emissions based company car tax system has been a little, too successful, resulting in a larger than expected fall in tax revenues. So it is no surprise that the Chancellor is continuing to incentivise further cuts in emissions by lowering the tax thresholds.”
“We are delighted to see that the government has responded to our calls for it to abolish the unjustified 3% diesel supplement, bringing diesel cars into parity with their petrol-engined equivalents by 2016.”
“We also applaud the government’s decision to listen to our calls and give employers and company car drivers a clear five-year signposting of future company car tax rates, which will enable them to choose a new, lower emission vehicle – lowering their tax bill at the same time.”
On capital allowances
“The fleet industry coped with the introduction of the 160g/km capital allowance threshold when it was introduced in April 2009 and it will cope with these ambitious new emissions targets.
“However the continuing application of the Lease Rental Restriction acts as nothing more than a double emissions tax on our industry. We will be vigorously lobbying to have this unfair fleet tax as we did with the 3% diesel supplement for company cars.”
National Loan Guarantee Scheme
“We can only welcome this latest government attempt to improve the supply of credit to British businesses. By extending this cheaper funding to lease arrangements, it has recognised how important a role asset finance plays in enabling companies to run and grow their business.”
“We hope this £20billion does make it through to where it is most needed and will be urging our members to contact one of the participating banks.”