Mark Sinclair's Blog: 11 March 2008
11 March 2008
Mark Sinclair is boss of leasing firm Alphabet
According to the Financial Times, fleets feature heavily in the Treasury's plans for a lower-carbon future.
With days to go to the Budget, Friday's Financial Times foresaw a Tax Reward for Green Drivers. Fleets, reported the paper, feature heavily in the Treasury's plans for a lower-carbon future.
In fact, the story did not contain much that we don't already know. It speculated on a "possible" cut in the 15% starting rate of company car BIK even though the new 10% tax break for sub-120g/km cars (from 6 April) was announced a year ago.
Nevertheless, it does look as though the Budget will, on the whole, give a boost to green vehicle fleet policies that promote clean company cars.
A new system of capital allowances linked to cars' CO2 emissions will affirm the tax-favoured status of company cars at the greenest end of the spectrum.
Companies will be able to gain a cashflow advantage from more favourable capital allowances if they buy cars in categories A and B of the Government's "green label" CO2 classification scheme.
If the proposed reform gets the go-ahead on Wednesday, firms will also be able to claim writing down allowances on mid-range company cars more easily.
Cars with high CO2 emissions will receive the least advantageous capital allowance treatment. Well, the Government never hands out carrots with one hand without waving its fiscal stick with the other.
Capital allowances are one of the final pieces of the green vehicle taxation jigsaw puzzle to fall into place. As they do, businesses that rely on company cars can plan ahead and budget with confidence. That is particularly important at a time when financial, environmental and Duty of Care considerations are making company cars increasingly sought-after.
Let's hope, too, that the Chancellor finally clears the air over AMAPs, as we've waited long enough for the results of the HMRC's prolonged review of the system.
Not that everyone is looking forward to the outcome. As BusinessCar reported last week, the Community & District Nursing Association is worried that a cut in AMAP rates will penalise its members "for not having a company car".
Given the frequent stories in the media about shortages of skilled nurses and midwives, you might think the Government would try not to penalise key mobile workers through these changes!