News

BVRLA Budget Summary 2010

Motoring tax changes

Company Car and Van Tax (Benefit in Kind)
Budget 2010 announces that:
· Zero benefit in kind charge for company provided cars and vans which cannot produce more than 0 g/km CO2 engine emissions under any circumstances when driven, this was previously
available only for electrically propelled cars or vans.
· New ultra low company car benefit in kind band of 5% will apply on cars emitting CO2 of
between 1 to 75 g/km.
The company car tax rates for 2012/13 have been confirmed with banding changes for the lower
polluting cars.

For more information on Benefit in Kind tax click here.
For further information on company car fuel benefits click here.

BVRLA comment: BVRLA is pleased that the Chancellor has heard our call for the zero rated benefit
in kind to be amended so that it is technology neutral and does not just favour electric vehicles.

Approved Mileage Allowance Payments - remain unchanged at 40p for the first 10,000 miles and
25p thereafter.

BVRLA comment: The Chancellor today announced a range of measures to encourage greener business motoring. However, by maintaining the AMAP payment at its current over-generous rate he is doing nothing to incentivise the 4 million claimants to drive fewer miles. These drivers are typically using cars that are older, more polluting and less safe than the modern vehicles supplied by lease and rental companies.

First year allowances (goods vehicles)
From 6 April 2010, businesses will be able to claim 100% first-year allowance (FYA) for the purchase of zero-carbon goods vehicles and it will be in place for five years.

BVRLA comment: While we welcome a technology neutral approach, we are still awaiting confirmation from HM Treasury that this FYA is available when a company is leasing goods vehicles, as it is for company’s leasing ultra low carbon cars.

Fuel duty
Next month's planned 2.76p increase in fuel duty will now be applied in three stages. 1p will be on 1 April 2010, the next 1p in October 2010 and the final 0.76p in January 2011. Thereafter, the increase will be 1p per litre for 2013 and 2014

BVRLA Comment: BVRLA remains disappointed that the Chancellor has failed to defer the planned 3p rise to help support business users. The commercial vehicle sector alone contributes over £4 billion in road taxes and the increase does nothing to support ailing UK transport operators.

Vehicle Excise Duty
Below are the rates for car VED from 1 April 2010

Notes
1. Alternative fuel discount: 2010-11 £10 all cars
2. Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006

Reduced Pollution Certificates will be available for vehicles that achieve early compliance with the Euro VI air quality standard with annual VED discounts of up to £500. This will be awarded for five years only, to support the environmental integrity of the scheme – with further details to follow at a later date. Whilst the EURO VI standard is agreed, the methodology of measuring the standard will be agreed later in the year.

BVRLA comment: It is great to offer an annual £500 VED rebate for operators buying Euro VI compliant vehicles, but where are people supposed to buy them? This is another green incentive that
is great in theory but will make little or no difference for businesses any time soon.

General business tax changes
Annual Investment Allowance (AIA) increases from £50,000 to £100,000 for qualifying expenditure incurred on plant and machinery from April 2010.

Lending to Business:
· Lloyds Banking Group and The Royal Bank of Scotland have agreed to lend £41 billion to small businesses; A Small Business Credit Adjudicator will be created to ensure SMEs are treated fairly when applying to their bank for finance. The Adjudicator will shortly be given statutory powers to ensure that the judgements its makes are enforceable. Steps will be taken to help companies diversify their sources of finance to non bank lending channels.

Roads
£100 million to fund repairs for local roads damaged by the recent adverse weather and £250 million investment to expand hard shoulder running on motorways.

BVRLA comment: According to the Annual Local Authority Road Maintenance Survey, local
authorities already have an £800m shortfall in road maintenance budgets so handing them an extra £100m is not going to go far.