Chancellor Philip Hammond’s first Autumn Budget to the House of Commons contained a number of changes likely to impact on van fleets. We look at the big stories.
Fuel duty freeze to remain in place
Fuel duty will remain frozen at 57.95 pence per litre from next April, the eighth successive year that rises have been cancelled.
Chancellor Philip Hammond said the freeze – the longest period in 40 years – will have saved the average car driver £850 and van drivers over £2,100 by April 2019, compared to the escalator plans announced under the Labour Government. This had been at a cost of £46bn to the Exchequer.
A review of fuel duty rates for alternatives to petrol and diesel will take place ahead of next year’s Budget. The LPG rate is to be frozen alongside the main fuel duty rate.
Christopher Snelling, FTA’s head of national policy, welcomed the freeze but said the Chancellor had missed an opportunity to cut fuel costs “and make the UK a more competitive place to do business”.
Van exemption from April 2018 diesel tax hikes
Eight months after a new diesel tax regime was mooted, the Government announced that diesel cars will be subject to increases in Vehicle Excise Duty and Company Car Tax from next April – although vans will be exempt.
The Chancellor said: “Before the headline writers start limbering up, let me be quite clear. No ‘White Van Man’, no ‘White Van Woman’ will be hit by these measures.”
The higher taxes on diesel cars will be used to fund a new £220m clean air fund to provide support for the implementation of local air quality plans.
Extra funding for ultra low emission vehicles
The Budget set out additional funding for electric vehicles, charging infrastructure and the Plug-In Car Grant.
The funding includes £200m for charging infrastructure, to be equally matched by private investors, forming a Charging Investment Infrastructure Fund, as well as £40m for R&D. The Government will also provide £100m towards the Plug-in Car Grant, which offers purchase incentives on new ULEVs, with the aim of helping this scheme to continue until 2020.
Drivers charging plug-in vehicles at work will no longer be subject to a Benefit-in-Kind charge as of next April.
Currently, electricity used to charge privately-owned vehicles at the workplace is classed as a Benefit-in-Kind, subject to tax based on the cost to the employer – although it’s not levied on company-owned vehicles.
With the aim of encouraging greener vehicles, Chancellor Philip Hammond said the Government would “clarify the law” to ensure those topping up at work don’t face a Benefit-in-Kind charge from April next year.
Regulation changes to support driverless car tests
Highlighting how there is “perhaps no technology as symbolic of the revolution gathering pace around us as driverless vehicles”, the Government said it wants to see fully self-driving cars, without a human operator, on UK roads by 2021.
To achieve this, the Government plans to create changes to the regulatory framework, such as setting out how driverless cars can be tested without a human safety operator on-board.
The Government also announced that the National Infrastructure Commission (NIC) will launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars.
Other announcements:
- The Fuel Benefit Charge and the Van Benefit Charge will both increase by RPI from 6 April 2018.
- A new £1.7bn Transforming Cities Fund will be created, with half to be shared by the six areas with elected metro mayors to give them the firepower to deliver on local transport priorities, and the remainder open to competition by other cities in England.
- Investment of £300m to ensure HS2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail improvements.
- £30m to trial new solutions to improve mobile and digital connectivity on trains on the TransPennine route.
- Tolls on the Severn Bridge will be abolished by the end of next year, as already promised.
- Insurance Premium Tax will be frozen at 12%.
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