Budget: Fleet industry disappointment at lack of new company car tax announcement
27 October 2021
Author: Sean Keywood
Fleet industry figures have reacted with disappointment to a lack of new information on future company car tax rates in today's Budget.
Commenting on the announcements in Chancellor of the Exchequer Rishi Sunak's speech, AFP chair Paul Hollick noted that there was little in the Budget of direct relevance to fleets.
However, in addition to welcoming the continuing freeze in fuel duty, and what he described as previously-leaked additional funding for public kerbside EV charging, he said: "There are some areas of disappointment. The biggest of these is the absence of BIK taxation tables for 2025-26, for which we've been campaigning and remain an issue for fleets embarking on electrification.
"We would also have welcomed any sign of future discussion on the government's future thinking on road pricing, but it appears that conversation remains some way into the future."
Giving his reaction, Leaseplan UK head of consultancy services and customer value Matthew Walters said: "Unlike his immediate predecessors, Rishi Sunak has given fleets and motorists ample warning of upcoming company car tax rates in his previous Budgets. However, today's Budget did not give us the rates for 2025-26 or beyond.
"With the Spring Budget due early next year, this isn't yet an urgent concern. But we would urge the chancellor to continue his record of transparency - and provide those rates as soon as possible, so that fleets entering into contracts today are able to plan properly for the future."
Regarding the rest of the Budget, Walters also welcomed the continued fuel duty freeze, but noted a general picture of uncertainty for the fleet industry.
He said: "This Budget has left the fleet industry with more questions than answers. So many previously announced consultations - into VED for cars, into VED for vans, into a ZEV mandate, and more - have been allowed to pass without any confirmed legislative action. And just what is the government planning around road pricing, which was one of the big talking points ahead of today?
"If the fleet industry is to prepare for the future, then it needs some of these unresolved questions answering as soon as possible."
Giving a more critical reaction to the Budget, BVRLA chief executive Gerry Keaney said: "The chancellor has missed an opportunity to give the industry essential clarity when it is most needed.
"At a time when the uptake of electric vehicles is ready to accelerate, the silence around areas such as benefit in kind tax rates is deafening. This only grows fears that rates will be drastically increased down the line.
"BVRLA members had clear asks for this Budget. The chancellor has failed to give tangible details on these asks, meaning that questions remain over what the government's plan is.
"The Net Zero Strategy last week marks a very positive step in the right direction; what we needed in today's Budget was more detail. Instead, we have been given headlines that offer no clarity, no foresight and no confidence."
Giving his Budget reaction, Tim Buchan, CEO of leasing company Zenith, said: "It's promising to see the government's ongoing commitment to greener transport, particularly in its continued investment in EV charging infrastructure. Today's announcement represents a total £2.8bn investment in the EV sector by 2030, which shows commitment towards achieving the government's net zero targets.
"However, what is still needed is clarity and detail on its long-term plan for decarbonising the UK's vehicles via taxation, grant and incentivisation. In the same vein, whilst it is heartening to see that the chancellor has frozen fuel duty and committed to freeze BIK taxation, there is no visibility on what the structure of vehicle taxation will be beyond 2025.
"Whilst this announcement is encouraging, a more comprehensive roadmap is needed so that the fleet industry can fully understand the role it plays in supporting the government to meet its targets and can effectively prepare for a lower-carbon future."