This was the chancellor’s third budget in 12 months and was declared as a Budget for the next generation.
For the fleet industry, there was the unexpected and welcome freeze on fuel duty, clarification on the company car tax regime and some encouraging news on the UK’s road and rail network.
It’s reassuring to hear that the UK economy is on course to be the fastest growing economy in G7 this year. The automotive industry accounts for over £8.5bn to the economy and in 2015 the leasing industry accounted for half the number of new cars registered on the road.
Today’s Budget is a positive step and very welcome relief for our Great British SMEs. With a £7 billion tax cut for small businesses, it is good to see that the Chancellor is supporting the lifeblood of our economy. As many of our customers are small enterprises, we welcome the reforms to both Stamp Duty Land Tax and Corporation Tax.
We are extremely surprised by today’s fuel duty freeze. This is a welcome boost to UK households and businesses saving an average of £75 per driver. Not only will this help UK motorists it will also be a continued reprieve to those who work in logistics, with light commercial vehicles expected to save an estimated £270 per year.
To hear that the Chancellor is powering ahead with a commitment to further infrastructure improvements, especially Crossrail 2 is encouraging for industry. With the current Crossrail link nearing completion, HS3 and the Manchester to Sheffield tunnel getting the green light, we are heading in the right direction to connect our British cities. However even though the Chancellor has pledged £50 million Pothole Action Fund for England and £130 million to repair roads and bridges from storm Desmond and Eva, there is still an awful long way to go in repairing Britain’s decrepit and pothole-ridden roads.
There is no doubt that the impact of taxation as a cost driver to the fleet market remains as significant as ever.
As we know technology has been outpacing targets where emissions are concerned for a number of years. The Chancellor has now caught up and reduced the Capital Allowances on Business Cars accordingly and by continuing to base Company Car Tax on CO2 emissions until at least 2021-22 he’s setting a clear intent for policy setters and motorists to adopt greener cars.
Following the Budget LeasePlan’s Consultancy Services team will work to analyse and translate the today’s Budget announcements – demonstrating exactly how individual elements or ‘levers’ of fleet policy will be affected by the changes.
For further information on the 2016 Budget, please visit insights.leaseplan.co.uk/budget
LeasePlan’s live commentary on the Budget on Twitter and can be found at @LeasePlanUK
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