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Fleets focus on April 2019 after bare Budget statement

Date: 13 November 2018   |   Author: Simon Harris

Limited news for fleets in chancellor's statement caused consternation in the fleet sector. Simon Harris reports.

In an unexpected swerve that smacked of the uncertainty embedded in the current political climate in the UK, there was little news for fleet operators in the government's Budget.

Chancellor of the Exchequer Phillip Hammond was widely anticipated to outline the future of company car tax beyond 2020, but instead resolved to revisit this crucial topic in the spring, hampering fleets' ability to plan ahead.

The urgency of the government trying to reach a deal with the EU before the UK's expected departure from the union at the end of March 2019, as well as a fraught atmosphere in the Conservative Party over Prime Minister Theresa May's leadership, suggested significant decisions were deferred.

There was so little in the Budget that fleet operator association ACFO cancelled a seminar scheduled a few days after the statement to the House of Commons.

ACFO, following meetings with HM Revenue and Customs, and HM Treasury and Department for Transport officials in the build-up to the statement, had anticipated a series of major announcements relating to the future of the company car.

However, the chancellor delayed revealing plans until next spring on post-2020/21 changes to company car benefit-in-kind following the introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP) for homologating vehicle emission and mpg data.

Analysis and debate around the future shape of company car benefit-in-kind tax and what the chancellor's announcement would mean for fleet decision-makers and company car drivers was due to be the focus of the seminar.

It was also expected to provide an update on the government's strategy on tackling air pollution and initiatives being introduced by local authorities, including clean air zones.

The seminar was also going to offer an insight on what a potential 'no-deal' Brexit means for fleets and the automotive industry if an agreement is not reached with the EU before the end of March 2019, as well as an analysis of the impact the introduction of WLTP is having on motor manufacturers and fleets, including vehicle supply.

ACFO chairman John Pryor said,"From a fleet decision-maker perspective, the Budget statement was hugely disappointing. It provided no clarity at all on which fleet operators can make any decisions with confidence and leaves company car drivers completely in the dark as to what their benefit-in-kind tax bills will be beyond 2020/21.

"Indeed, for fleet decision-makers and company car drivers, the landscape is completely unchanged post-Budget from the pre-Budget scene: lacking clarity and providing no basis for long-term fleet planning and stability.

"Reluctantly, given the underwhelming Budget statement as far as fleets are concerned, ACFO has decided to cancel the autumn seminar. 

"If the chancellor announces the long-term shape of company car benefit-in-kind taxation in the spring, as he has promised, ACFO will hold a seminar as soon as possible afterwards."

In the Budget, the chancellor confirmed a freeze on fuel duty for the ninth consecutive year as well as inflationary increases in vehicle excise duty and the fuel benefit charge (for business driver provided with free fuel for private mileage) from April 2019.

Elsewhere, criticism of the government continued, with a lack of incentives to give falling new car sales a boost.

SMMT chief executive Mike Hawes said, "Amid continuing Brexit uncertainty, the automotive industry was looking for a stimulus to boost a flagging new car market. We wanted to see more incentives for consumers to purchase the latest, most environmentally friendly vehicles.

"The forthcoming review into the impact of WLTP on Vehicle Excise Duty and company car tax must, therefore, ensure that motorists buying the latest, cleanest cars are not unfairly penalised. [The] industry looks forward to working closely with government on this review to ensure we encourage the newest, cleanest vehicles on to our roads rather than incentivising consumers and businesses to keep older vehicles going longer."