Autumn Budget 2018 Fleet Snapshot
WITH THE EYES OF THE UK FLEET AND COMPANY CAR WORLD FIXED KEENLY ON PHILLIP HAMMOND'S AUTUMN BUDGET IT WAS A CASE OF NO NEWS IS NOT SO GOOD NEWS....
Here are some key highlights:
WLTP CLARIFICATION POST NEDC IMPACT IN SEPTEMBER 2018
This has been Delayed to Spring 2019 at the Earliest
As most Company Car drivers will be acutely aware the C02 of new vehicles registered after September 2018 have been correlated to the new Worldwide Harmonised Light Vehicle Test (WLTP) figure using a calculation known as NEDC, whilst it sounds complex it was expected to maintain C02 levels for new cars at similar levels to pre September, the reality is many vehicles have increased by about 10% pushing them up 2 C02 bands for company car purposes, increasing Drivers Tax Charges and Company National Insurance costs.
From April 2020 all vehicles registered will then be based on full WLTP standards which is expected to increase reported C02 again, it was hoped that the Budget Statement would address Fleet Operators and Company Car Drivers concerns by announcing the impact so far and expected impact in 2019 and 2020 and whether any measures would be put in place to mitigate, what we saw in the statement was the following:
"The government will review the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) to report in the spring"
Essentially the issue has been kicked down the road for another 6 months, not good news for the industry.
BENEFIT IN KIND TAX VALUES FOR 2021/22 AND BEYOND
Remember the times when the UK Government would announce company car tax rates 5 years ahead?
This allowed Fleet Operators and Company Car Drivers to plan their next vehicle choice strategically given most company cars will be on 3 or 4 year contracts, as a result drivers migrated to lower emitting vehicles and overall C02 output declined, a win for drivers and reduced environmental impact.
Those days seem like a distant memory now, with the recent WLTP (NEDC) impact and government BIK tax banding changes Company Car tax has increased significantly in recent years and months and now we are in a position where any driver with a contract ending after 2021, hundreds of thousands of drivers, does not know what their tax position will be from April 2021 onwards.
In addition any drivers now selecting a new vehicle will be in the same position, no clarity beyond the next 2 and a half years, its not clear how this is supposed to drive overall Company Vehicle strategy which previously seemed to be based on reducing total emissions.
Any wonder many drivers are simply opting out of Company Car schemes, taking their Cash Allowances and signing up for Personal Contract Hire deals instead?
For Fleet Operators we will expect to see more delayed decision making as we wait and see what the Finance Bill brings and potentially waiting till Spring 2019.
Quite how this supports the Government's Road to Zero Strategy isn't known at this stage.
FUEL DUTY FROZEN FOR 9TH SUCCESSIVE YEAR
OK we'll take this one!
£420M TO TACKLE POTHOLES
This will be allocated to local authorities this financial year to repair damaged roads, and invest in keeping bridges open and safe, time will tell if this is enough but its a step in the right direction.
THE NATIONAL PRODUCTIVITY INVESTMENT FUND IS INCREASING TO A TOTAL OF £37 BILLION
Sounds big!
From Transport perspective this is a "Boost to funding for local transport across England, announcing a further £770 million for the Transforming Cities Fund, creating a £90 million Future Mobility Zones fund so local areas can trial new ways of providing transport services".
Metro Mayors in 6 locations, Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, West of England, West Midlands, and Tees Valley will split £240m for Transport Investment.
PLUG IN HYBRID ELECTRIC VEHICLE (PHEV) GRANT CHANGES
OK so this wasn't announced in the Autumn Budget as they had dropped the bombshell 2 weeks ago, the Grants for PHEVs would be ending on 9th November 2018 and the Grants for Electric vehicles would reduce by £1,000 to £3,500.
Not surprisingly this produced a surge in demand and all available grants were taken so the new rules are now in place, no grants for PHEVs.
We were hoping the Budget Statement might reference this or provide other initiatives to support the Road to Zero strategy, sadly not, not even bringing forward the 2% BIK rate for Electric Vehicle (EVs) from 2020.