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Budget | 30 OCTOBER 2018

ACFO chairman John Pryor comments on Budget 2018

“Introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP) for homologating vehicle emission and MPG data, the basis for the new regime, post 2020, has been in the pipeline for some time and the fleet industry had been led to believe that WLTP-based rates for 2021/22 and beyond would be announced in the 2018 Budget.

“Furthermore, the Chancellor did not even announce rates beyond 2020/21 for company cars tested under the old New European Driving Cycle (NEDC) and not under WLTP.

“Historically, the Chancellor has announced company car benefit-in-kind tax rates for up to four years in advance. The Chancellor’s failure to make an announcement and provide clarity to fleet decision-makers and company car drivers will, ACFO fears, further driver-employees to opt for a cash alternative instead of a company car.

“Given that ACFO research and industry data suggests that when employees make that move they select a car with a higher CO2 emissions figure than the company car they were driving the further delay in announcing tax rates is likely to hamper the government’s environmental and air quality improvement strategy.

“As whole ACFO questions what has happened to the government’s ‘green’ agenda. Recently the government cut the Plug-In Car Grant and in the Budget it has failed to answer our call for a U-turn on the decision to increase to 16% benefit-in-kind tax on cars with emissions of 50g/km or below in 2019/20 and bring forward the already announced reduced rates, including the 2% threshold for 100% electric models and those with an electric mileage range of up to 130 miles, to April next year from 2020/21.

“Those twin decisions will ACFO believe, only serve to dampen fleets’ enthusiasm for ultra-low and zero-emission cars, at least in the short term, at a time when the government says it wants to drive out petrol and diesel engined vehicles from the UK car parc.

“Budget 2018 has been a waste of a golden opportunity for the Chancellor to provide both clarity and long-term stability to enable fleet decision-makers to shape company car policies. The fleet industry must now wait until spring 2019 to know the future shape of company car benefit-in-kind tax and, in the meantime, uncertainty continues to rule.”

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