24th November 2016
Musing over the Autumn Statement from the perspective of fleet and business drivers
Two blokes sharing the surname Hammond have considerable clout when it comes to the world of motoring. Richard, Top Gear’s lovable ‘hamster’ likely pops into people’s minds more readily. The other is, of course, our new Chancellor of the Exchequer, Philip Hammond, who delivered his first Autumn Statement yesterday. It also happened to be his last, not because he flunked his debut, but because the government has decided that the UK will now only have one annual budget, incidentally held each autumn, with a financial update issued every spring.
Trak Global Group’s products and services are primarily involved in the automotive industry and touch the daily lives of the spectrum of motorists from experienced company car and van drivers to newly-qualified 18-year-olds, so it’s unsurprising that Mr Hammond’s announcements relating to road users were of significant interest to us.
Commencing on a positive note, the Chancellor announced that fuel duty will be frozen for the seventh consecutive year. This means that even if Brexit negotiations, OPEC shenanigans and other factors throughout the next few wintry months result in pump prices increasing slightly, nobody can point the finger at fuel duty. Remaining at its longstanding current level will provide some relief to haulage firms, fleet managers, independent business drivers such as entrepreneurs and SME bosses, and indeed everyday motorists from 18 all the way to pension age.
Many of the UK’s roads are in a forlorn state, primarily because of the ubiquity of potholes, which can easily cause damage to business and private cars and vans, and anyone whose commute encompasses urban areas will be well aware of congestion at peak times. Mr Hammond’s announcements that £220 million has been earmarked for addressing infamous pinch-points and that an additional £1.1 billion will be provided by central government by 2021 to bring the condition of roads up to more acceptable standards are therefore most welcome.
Green-minded fleets and private motorists may be tempted to take the plunge and go for an ultra-low emissions vehicle or even a fully electric car or van after the Autumn Statement revealed that between now and March 2019 there will be a 100% first-year capital allowance available for the installation of PHEV and EV charging points, although this is slightly clouded by the VED shakeup that will see a £140 standard rate charged for year two onwards for all but zero-emissions vehicles registered on or after June 1st 2017.
At face value it seems positive news to know that zero-emissions business vehicles will be taxed at just 2% when new bands are introduced in 2020 and that BIK rates will range between 2-to-14% for vehicles emitting 1-50g/km CO2 depending on their pure-EV ranges, both measures hopefully encouraging more fleets to go green and help alleviate the UK’s alarming pollution levels and public health risks. The tide needs to start turning now, though, not in a few years’ time, the irony being that taxation on such vehicles will actually increase in real terms between now and 2020 when the complicated new 15-band car tax system won’t exactly be a doddle for fleet managers to digest.
An IPT increase of 2% was also announced, with the 12% rate set to come into play on June 1st 2017, which is the third rise in the last eighteen months and illustrates how Mr Hammond’s first and last Autumn Statement ended up being a rather mixed bag from the perspective of business and private motorists. Primarily focussed around medium-term gains, this important event in the fiscal calendar could admittedly have been somewhat gloomier, though, and represented largely palatable news.
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