Fuel Duty
In his speech, Mr Osborne said fuel duty would be frozen for the rest of this year in line with the Budget in March but did not announce a further cut.
The statement follows warnings from organisations across the country that an increase would impede UK plc.
Paul Lippitt, principal consultant at Lex Autolease, commented: “It is pleasing to see that the fuel duty freeze planned for September will still go ahead. This should go some way to mitigate the impact on British businesses that are already burdened by some of the highest fuel prices in Europe. We would like to see the Government go even further and take steps to reduce fuel duty to ensure that firms are not priced off the road altogether.”
MoT:
In addition the Government will consult on extending the deadline for new cars and motorbikes to have their first MoT test from three years to four years, which would save motorists over £100m a year.
In response, Ashley Sowerby, managing director at Chevin Fleet Solutions, said: “Fleets should probably take a good look at the way in which the proposed increase in the first MoT from three to four years affects their risk management. For those that operate on replacement cycles of more than three years, it could create a potential weak spot. For example, you might have a high mileage vehicle that has covered perhaps 75,000 miles after three years which, while it has undergone regular maintenance, will not be required to pass an MoT for another year. From a duty of care point of view, that vehicle would represent an increased risk and fleets would perhaps need to ensure that they had procedures and arrangements in place that recognise that fact.”
BiK:
The Government said that there would be no changes to company car tax rates announced for 2019-20.
As per the March 2015 Budget, the appropriate percentage of list price subject to tax will increase by 3 percentage points for cars emitting more than 75 grams of carbon dioxide per kilometre (gCO2/km), to a maximum of 37%, in 2019-20. There will be a 3 percentage point differential between the 0-50 and 51-75 gCO2/km bands and between the 51-75 and 76-94 gCO2/km bands. (Finance Bill 2016)
Insurance Premium Tax
The Government also announced that it is increasing Insurance Premium Tax from 6% to 9.5%.
The rise of more than 50% has been criticised by ACFO chairman John Pryor, who said it seems to be extremely penal in respect of vehicle insurance, which is a legal requirement and added that it “places an increased onus on fleet decision-makers to ensure that employees who drive their own cars on business trips are suitably insured for the purpose”.
