The Chancellor Jeremy Hunt announced the Spring Budget on Wednesday, setting out the estimated impact of changes to tax, welfare and public spending.
For the automotive industry, the Chancellor announced that there will be no increases in fuel duty for the next 12 months, which saves drivers roughly £50 a year.
Also announced were plans to extend full expensing to rental and leasing, which according to the BVRLA, could unlock £1bn of additional investment in commercial vehicles.
Keith Hawes, Director at Nationwide Vehicle Contracts said:
“Positives include the full expensing for vans acquired via a lease. Many businesses operating commercial vehicles are turning to leasing versus outright purchase so they should now see additional tax advantages from leasing.”
However, the government has failed to address an opportunity to support the transition to a greener and cleaner car industry.
It was hoped that the Spring Budget would deliver reduced VAT on new EVs, that would promote drivers to switch to electric, and end the VAT ‘pavement penalty’ on public charging.
Keith Hawes, added:
“Whilst the Chancellor’s budget statement served-up some positive announcements for both business users and private motorists it appears to fall woefully short in addressing and incentivising the transition and adoption of zero emission vehicles.
“The industry had been calling for the level of VAT for public charging to be brought into line with that charged for using a private home charging unit.
“It’s hardly equitable for those drivers who have access to home chargers to be paying VAT at 5% whereas those who have to rely on public charging are charged 20%.”
Looking for more car news? Nationwide Vehicle Contracts produces various blogs, such as Leasing vs Owning A Car in 2024 and Clean Air Zones: What New Pollution Rules Mean for You.
We are also one of the UK’s largest car leasing brokers, offering a range of leasing deals to suit your every need. For more information, check out our deals or call us on 0345 811 9595.
