Company Car Tax:
The main news for fleets was that company car tax will continue to be based on CO2 emissions until at least 2021 despite fears that the Government would change tactic.
In addition, tighter capital allowance thresholds to promote ultra-low emission vehicles have been set out. Effective from April 2018, the main rate (18%) threshold is reduced from 130g/km to 110g/km. From the same date, the 100% first-year allowance threshold will also be tightened to vehicles emitting 50g/km or less, down from 75g/km, and this has been extended to 2021.
Said to reflect the falling emissions of new cars, the revisions are predicted to raise £155m in revenue by the end of the 2020/21 tax year.
The Government added that consultations will take place before 2021 to devise new bands which incentivise the cleanest cars.
Also significant for fleets was the announcement of a continued freeze on fuel duty for 2016-17 at 57.95 pence per litre – the longest fuel duty freeze in over 40 years.
And the Government also announced that it will start trials of comparative fuel price signs on the M5 between Bristol and Exeter by spring 2016 to drive fuel price competition and help motorists save money.
The Chancellor used the Budget to announce a package of support measures for driverless cars, which will see:
- Trials of driverless cars on the strategic road network by 2017
- A consultation this summer on removing regulatory barriers within this Parliament to enable autonomous vehicles on England’s major roads
- The implementation of a £15m ‘connected corridor’ from London to Dover to enable vehicles to communicate wirelessly with infrastructure and potentially other vehicles.
The Government said it is launching the process for setting the Second Roads Investment Strategy, which will determine road investment plans for the period from 2020-21 to 2024-25.
Road improvements including the allocation of an extra £161m to Highway England upgrade the M62 to four lanes, as well as £75m to develop the case for a potential Trans-Pennine tunnel between Sheffield and Manchester and options to enhance the A66, A69 and the north-west quadrant of the M60.
The Government is setting out how the Pothole Action Fund will be allocated across England in 2016-17, with £50m allowing local authorities to fill nearly a million potholes.
Whilst it was feared that the Government would make an announcement on salary sacrifice arrangements, including for cars, no changes were actually implemented. However, the Treasury said that: “The Government wants to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes: clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010. The Government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes.
“However, the Government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”
Funding for low emission vehicles:
The government will provide £38m in grants for collaborative R&D into low emission vehicles. These will be delivered through the Office for Low Emission Vehicles (OLEV) and Innovate UK and will be matched by industry.
The Midlands will also receive over £15m funding to support R&D into lowering vehicle emissions.
Severn Bridge Toll:
The Government said it will, subject to consultation, halve tolls after the existing concession on the Severn River Crossings ends in 2018. It also added that it will evaluate the costs and benefits for developing a free-flow barrier-free tolling system.