IFS responds to the Spring Statement
Whilst the topic at the centre of discussions within the House of Commons this week is Brexit, the Chancellor still delivered the Spring Statement on 13 March. So what did the Spring Statement deliver?
WLTP & Company Car Tax rates
The fleet industry had hoped that the statement would provide a much needed response on the WLTP consultation, instead Hammond confirmed in papers which accompanied the Spring Statement that the WLTP review will be published ‘in the coming months’.
Also noticeably absent from the Spring Statement was any reference to Company Car Tax rates (CCT) for 2021-22 onwards. The rates, which should have been published years ago, are likely to be included in the summer’s draft Finance bill, meaning fleet managers continue to face difficulties managing budgets.
“It’s disappointing to see that the Chancellor did not use the Spring Statement to provide clarity on issues that are having huge impacts on our customers, especially after the high levels of lobbying from our Industry associations and publications.” Lee Hamlett, Commercial Director at Inchcape Fleet Solutions commented. “The lack of clarity means that our customers continue to have no idea on what company NI and driver BIK tax rates will be from 2021, or whether the 2020 rates are subject to change.”
VED for LCVs
The Spring Statement also saw no clarity on the future of Vehicle Excise Duty (VED) for light commercial vehicles.
The Government has previously indicated that:
The new system would take account of van weight with a two-category approach each sub-divided into CO2 bands
Ongoing incentives would be provided in the first year and beyond for new zero emission, ultra-low emission and other alternatively fuelled vans.
All that has been confirmed is that they will be announced by the Government prior to April 2021 implementation.
Mobility is a hot topic within our industry, with huge technological changes taking place that will impact the way we travel sooner than originally predicted. Read more about Mobility as a Service here.
In the papers supporting the Spring Statement, the Chancellor confirmed that the government will be publishing a paper on the matter. ‘Future of Mobility: Urban Strategy’, is expected to be released in the coming months, and will set out the governments approach to ensuring the UK is at the forefront of this movement.
“Commitment from the Government to ensure the UK remains a front runner in the future of mobility is a fantastic step. For our industry and customers, these technological changes will impact fleets dramatically, transforming the way people and goods move and connect in coming years.” Jennifer Davis, Sales Director at Inchcape Fleet Solutions added.
Transforming Cities Fund
One announcement made in the Spring Statement was that of £60million investment from the Government’s Transforming Cities Fund in 10 cities across the UK. This investment will fund 30 new schemes such as road improvements and new cycle lanes.
The 10 cities selected for this were: Derby and Nottingham, Southampton, Leicester, North East combined authority, Portsmouth, Norwich, Sheffield City Region, Plymouth, West Yorkshire Combined and Stoke on Trent.
As expected, the Chancellor could not avoid the topic of the moment. Within his speech he referred to “uncertainty” hanging over our economy in the shape of Brexit with agreements still to be reached between the Government and the EU. He also pledged to spend £26.6 billion to boost the economy if MPs vote on deal to leave the EU.