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November 26, 2015updated 12 Apr 2017 11:29am

Fleet lessors react to UK Autumn Statement

Fleet lessors welcome news from UK chancellor of the Exchequer George Osborne that the government will invest in the ultra-low emission vehicles sector and road infrastructure, but criticise increases for diesel surcharges.

By Sotiris Kanaris

UK Chancellor of the Exchequer George Osborne’s reveal that the government will invest in the ultra-low emission vehicles sector and road infrastructure was welcomed by fleet lessors, while news on fuel surcharge were not viewed so positively.

The government will spend more than £600m between 2015-16 and 2020-21 to support uptake and manufacturing of ultra-low emission vehicles (ULEVs) in the UK.

According to Osborne this expenditure aims to maintain the UK’s global leadership in the sector, which has seen one in four of all European electric vehicles built in the UK. It also aims to keep the UK on track for all new cars to be effectively zero emission by 2040.

Chris Chandler, principal consultant at Lex Autolease, said: "The government’s support of the ULEV industry has helped the UK to become a world leader in green technology. The new tranche of investment, worth more than £600m, will help to cement Britain’s role in driving the sector and is a much welcomed incentive for companies considering adding ULEVs to their fleets."

The Roads Investment Strategy signals the biggest investment in roads since the 1970s. This overall £15bn of investment will include resurfacing over 80% of the strategic road network, delivering over 1,300 miles of additional lanes, the equivalent of travelling from Bristol to Newcastle four times.

Matt Dyer, managing director of LeasePlan UK, commented: "The Road Investment Strategy, which is set to resurface 80% of the UK’s roads, will be especially pleasing for UK businesses, whose drivers have suffered from poor road infrastructure, congestion and pitted surfaces for decades. These roads are vital arteries for businesses, and it is reassuring that the Government now views this as a priority."

Heather Simpson, principal consultant at Lex Autolease, said: "The impact of increased investment in Britain’s road infrastructure will be enormous for the country’s many businesses who rely on the road network to transport goods and employees. We hope that the effective implementation of the Roads Investment Strategy will slash journey times and congestion levels, in turn reducing fuel bills and improving driver efficiency."

Osborne also announced a delay in the removal of the current diesel surcharge on benefit-in-kind car tax, which was set to finish as of April 2016.

Osborne said: "The government is retaining the diesel supplement in company car tax until 2021, when EU-wide testing procedures will ensure new diesel cars meet air quality standards even under strict real world driving conditions."

Commenting on this decision, Simpson said: "The delayed removal of the 3% diesel surcharge is a blow for company car drivers, potentially impacting four out of five drivers."

Matthew Walters, Head of Consultancy Services at LeasePlan UK, called this announcement the "biggest surprise of the afternoon" and added: "What is more cynical is that the Chancellor used the fig leaf of EU emissions as a rationale to enact this change. Our industry has sought certainty about future tax year liabilities – which government has provided – yet this has been done with no advance notification and with no grandfathering for those affected individuals who have already made what they thought was an informed choice based on future years.

"Employers will find themselves suffering unexpected NIC increases whilst employees, who will have taken the tax cost into consideration when choosing their vehicle will now find themselves saddled with a tax cost much higher than expected."

Osborne has also expressed the government’s concern over salary sacrifice schemes. He said: "The government remains concerned about the growth of salary sacrifice arrangements and is considering what action, if any, is necessary. The government will gather further evidence, including from employers, on salary sacrifice arrangements to inform its approach.

Alphabet said that the Autumn Statement was a rectification of an ‘economy in crisis’ with a clear focus on a more environmentally conscious Britain, benefitting the responsible driver.

"Although the benefit-in-kind tax bills are rising, it is good to see such a forward-looking statement aiming for zero emissions by 2040, a conscious effort to improve the supporting infrastructure whilst complimenting responsible drivers – an encouraging future for sustainable business mobility," the company wrote.

 

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