We have had the Budget for March 2016 and what does this mean in real simple terms for your vehicle fleet?
- From 2018 the 50% disallowable finance element will be reduce from its current threshold of 130g Co2 to 110g Co2 which can represent a cost for those between 130g – 110g of £1000 over the life of the contract when comparing on a Net Present Value calculation. It is therefore important that you review your current policy or leasing companies whole life cost policy to ensure they are accounting for this.
- Fuel Duty has been frozen, so we continue to pay duty at a rate of 57.95p per litre of fuel. While fuel is a commodity that all of us cannot do without there are different ways in which you can pay for fuel that will mean a reduction in the pump price and these should always be considered
- The 100% First Year Allowance (FYA) for businesses purchasing low emission cars for a further three years to April, 2021. This means that you can offset the cost of these low emission cars against your corporation tax. Threshold at the moment are 75g/km falling to 50g/km of CO2 from April 2018, to reflect falling vehicle emissions.
- The Government will continue to base Company Car Tax on CO2 emissions of cars, and consult on reforming the lower CO2 bands for ultra-low emission vehicles to refocus incentives on the cleanest cars beyond 2020-21.
- The Severn crossing that links Wales with the South West of England tolls are to be halved once in public ownership. The Government are looking to move the toll solution to a similar model that is used for the Dartford tunnel.
- Salary Sacrifice - cars, the government are concerned with the growth of this product being offered within company’s flexible benefits package. Government says it 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. No timescales are given on this so definitely one to watch.
Overall, this was not an exciting budget for Fleet but one that has provided guidance on travel of government policies. As we all know Plug in Hybrid Electric Vehicles are growing in popularity and will continue to do so as the government continue to focus on Co2 as its main taxation policy. Therefore it is vitally important that you review your choice list and work with your leasing provided to ensure they are working in your best interest following this budget announcements.
Any questions or support please give me a call – 07801472247