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THE Chancellor’s eighth Budget brought a clear message on a continued drive to lower emissions which influences the kind of vehicles the UK market will want in years ahead. As at least half of those vehicles will be leased, we look to see what the Federation funders thought.

Alphabet:

“Overall, the 2016 Budget was an insight to a more forward-looking Britain with a clear focus on the environment, efficiency in travel and driver safety.

Alphabet fuel price rise
Mark Gibson, Alphabet

“With tax relief provided for low emission and electric vehicles, the determination to meet air quality standards was clear. The drive for Britain to lead the way in connected and driverless vehicles also supports the progressive outlook on the future of mobility, with ultra-low emission vehicles at the centre.

“Evidenced by a commitment to invest in the future of mobility, the announcement of a £61 billion investment to support the mobility network transformation and advancement is promising. It is good to see such a forward-looking statement – an encouraging future for alternative and sustainable business mobility.”

 Mark Gibson, Head of Marketing and Business Development

Arval issued this graphic to sum up the Budget:

Arval budget

 Hitachi Capital Vehicle Solutions:

“Hitachi Capital is pleased to learn that fuel duty will be frozen for the next 12 months, for a sixth consecutive year. This is excellent news for individuals and businesses alike, especially when the Chancellor opened and closed his Budget speech with a statement on how we should ‘act now and not pay later’.

Jon Lawes, managing director of the Hitachi Capital Vehicle Solutions
Jon Lawes, Hitachi MD

“We are also pleased to learn that company car taxation will not be radically changing in the next four years, allowing businesses and individuals to appropriately plan ahead. Whilst there was speculation of taxation being based on NOx emissions, remaining with the widely accepted CO2 based banding is a welcome relief.

“In contrast to this reassuring news, it was disappointing to learn of a further increase to Insurance Premium Tax. A hike last year of 3.5%, which only came into force in November 2015, was increased by a further 0.5% it was announced. Although this is lower than was expected by some predictions, and the funds raised from the 0.5% increase will go to improving flood defences, many individuals and businesses are yet to see the increase in their premiums.

“We are, however, pleased to hear of the support George Osborne is bringing to smaller businesses and infrastructure. Learning of the green light for projects like High Speed Rail 3 and Cross Rail 2 is brilliant news for the UK as a whole, and should help drive investment across the country. Small measures, like the reduction of the Severn bridge tolls, will also be a benefit seen by those who use the route.

“It was also promising to learn the personal tax allowance limit has been confirmed at £11,500 from April 2017, when the higher rate threshold will also rise to £45,000. This combined with the new, incentivised Lifetime ISA should help more people save for the future.

“Similarly, it was reassuring to hear George Osborne’s support of micro and small businesses. Self-employed individuals will benefit from the abolishment of Class 2 National Insurance Contributions and businesses will welcome reductions and cuts to business rates and Capital Gains Tax.

“However, there was no mention by George Osborne of any changes to salary sacrifice schemes in his statement. In the full budget, no changes have been suggested to these schemes as yet, however the Government has gone as far to say ‘pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit’ from such schemes.

“Hitachi Capital will continue to work with suppliers and customers around salary sacrifice schemes and how they can benefit from such schemes under current and future legislation as and when it is published.”

Jon Lawes, Managing Director of Hitachi Capital Vehicle Solutions

Lex Autolease:

“The lowering of the CO2 threshold from 160 g/km to 130g/km, which came into effect in April 2013, meant many customers have used 130g/km as a benchmark for their fleet decision making for the last three years.

Eddie Amaro, Lex Autolease
Eddie Amaro, Lex Autolease

“The question now is whether the newly-announced, lower threshold of 110g/km replaces 130g/km as the crucial figure around which fleet strategies may be designed.

“If the new regime came into effect tomorrow, a significant proportion of fleet vehicles between 110 g/km and 130 g/km would be reclassified overnight – as many as 50 per cent of the vehicles on the Lex Autolease fleet fall in this range.

“However, Lex Autolease data indicates that car fleet emissions are moving in the right direction. The average CO2 emissions on the Lex Autolease fleet to the end of August 2015 was 119g/km – down from 124g/km at end of August 2014 – and new cars delivered by end of August 2015 had an even lower average of 114gkm.

“We believe that at the time of the new regime’s introduction in April 2018, customer fleet average emissions should be around the 110g/km mark. Though this still precludes a significant portion of vehicles which have emissions above the median, it is coherent with the downward direction of emissions levels.”

Eddie Amaro, Principal Consultant, Lex Autolease

 

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