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Budget 2018: The main points for fleets

Philip Hammond has delivered his third Budget as chancellor, bringing in changes for areas including welfare and pensions but leaving a big hole when it came to clarity for the future shape of company car taxation.

The Government will set out proposals on VED reform for vans

The main changes for fleets were:


The chancellor has ignored pleas from the fleet industry for clarity on future company car tax rates once the full WLTP regime has kicked in – with no announcement in today’s Budget on how BiK rates will be calculated from 2020/21 onwards.

This is despite repeated calls from the fleet industry – including Fleet World’s campaign – for the Government to provide much-needed clarification.

Instead, the Budget Red Book merely says: “The Government will review the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) to report in the spring. WLTP aims to provide a closer representation of ‘real-world’ fuel consumption and CO2 emissions.”

For more details and industry comment on how the lack of tax clarity hits fleets, click here.

VED reform for vans:

The Red Book also announced that from 1 April 2019 VED rates for cars, vans and motorcycles will increase in line with RPI. It also revealed that the Government will shortly publish a summary of responses from the consultation on VED reform for vans, published in May 2018. The response – now published – sets out proposals to introduce environmental incentives from April 2021, including a £0 standard rate for zero-emission vans. Bands and rates will be set out ahead of Finance Bill 2019-20.

For more details on the Government plans for VED reform, click here.

Potholes and roads funding:

A £28.8bn National Roads Fund was announced. Paid for by road tax – for the first time ever – this includes £25.3bn for the Strategic Road Network (motorways, trunk and A roads); said to be the largest ever investment of this kind.

It will also help fund the new network of local roads (known as the Major Road Network), and larger local road projects.

Local authorities will receive £420 million to fix potholes on roads and renew bridges and tunnels, and there will be a £150 million to improve local traffic hotspots such as roundabouts.

For more details and industry comment on the funding, click here.

Fuel duty freeze confirmed:

The chancellor confirmed the continued fuel duty freeze, previously announced by Theresa May in her Tory conference speech.

It marks the ninth consecutive year that fuel duty will be frozen and will cost the Exchequer £840m in lost revenues for the 2019/20 tax year while saving the average driver a cumulative £1,000 by April 2020.

Elsewhere in the Budget Red Book, the Government announced that from 6 April 2019 fuel benefit charges will increase in line with RPI and the van benefit charge will increase in line with CPI.

For more details and industry comment on the fuel duty freeze, click here.

Electric vehicles:

The Government said it would extend the first-year allowance for electric charge-points for four years. This will extend such allowances until 31 March 2023 for corporation tax and 5 April 2023 for income tax purposes.

However, there were no changes to this month’s announcement that grants for plug-in hybrids have now been cut under a reformed system focused on increasing uptake of electric and hydrogen fuel cell vehicles. And there was also no announcement of an early introduction for the 2% company car tax rate for electric vehicles, despite the fleet industry having highlighted how this would help with government plans to increase ULEV uptake.


To support the Industrial Strategy Future of Mobility Grand Challenge, £90m from the National Productivity Investment Fund will be allocated to the Transforming Cities Fund to create Future Mobility Zones. This will trial new transport modes, services, and digital payments and ticketing. £20m of this will be allocated to the West Midlands

The chancellor also announced an additional £680m of funding for sustainable transport including buses, trams and cycling routes through the Government’s Transforming Cities Fund. This brings the total amount of funding available through the Transforming Cities Fund, which aims to support productivity and prosperity through investment in public and sustainable transport, to £2.4bn.

For more of the latest industry news, click here.

Written by Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

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