Pre Budget 2009

The Chancellor of the Exchequer has delivered his 2009 Pre Budget Statement. Key highlights include:

For our full summary click here.

Company Car and Van Tax (Benefit in Kind)

To help stimulate the take up of electric cars and vans the benefit-in-kind charge for private use of company-provided vehicles will change as follows from 6 April 2010 to 5 April 2015:-

electric cars - company car tax (CCT) will be reduced from 9% to 0%
electric vans - company van tax (CVT) will be reduced from £3000 to £0 (nil rate)

Class1A National Insurance Contributions charge on employers for electric car and vans will be nil.

From April 2012 the CO2 thresholds for company car tax (CCT) will be shifted down by 5g CO2 per km and the graduated table for of CCT bands will be extended downwards to a new 10% bands for cars emitting 99g/km CO2.

BVRLA comment: We are pleased to see that the Chancellor has heard our call for the company car and van tax regime to be modernised to stimulate the take-up of electric vehicles. We are disappointed that the Chancellor has once again failed to remove the unjustified and discriminatory 3% supplement on diesel company cars.

The quick links on the right have links to the company car and van fact sheets.

Fuel benefit charge

To encourage fuel-efficient travel the fuel benefit-in-kind charge from 6 April 2010 will change as follows:

the multiplier for cars will increase from £16,900 to £18,000
the van fuel benefit charge increases from £500 to £550.

BVRLA comment: The Chancellor has opted to unfairly increase taxes on the employees provided with fuel for private use.

To access the fuel benefit charge tax fact sheet click here.

Approved Mileage Allowance Payments

The AMAP rate remains 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 fleets.

First year allowances

From 6 April 2010, businesses will be able to claim 100% first-year allowance (FYA) for the purchase of electric vans.

BVRLA comment: We will be working with HM Treasury to ensure the 100% FYA can be claimed by the leasing firm providing an electric van to the customer.

Fuel duty

As announced at Budget 2009, fuel duty will increase by one penny per litre in real terms on 1 April each year from 2010 to 2013.

BVRLA comment: We are disappointed that the Chancellor has failed to defer the planned 1p 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. The BVRLA will be stepping up its efforts to ensure that HM Treasury works on proposals for an essential user fuel rebate. With around 40% of the UK truck parc aged over eight years, the BVRLA believes that the Chancellor should have introduced some form of incentive scheme that would enable embattled commercial vehicle operators to purchase and lease more environmentally friendly Euro IV or Euro V vehicles.

Vehicle Excise Duty

There is no postponement on the introduction of the first year rate to be introduced in April 2010 for cars.

Corporation tax

Small business (profits not exceeding £1.5 million) will not see the planned corporation tax rise being implemented next year - the rate will therefore remain at 21% in tax year 2010/11 and increase to 22% in tax year 2011/12.

The main corporation tax (profits exceeding £1.5 million) rate will remain at 28%.

National insurance increase

Employee, employer and self-employed rates of National Insurance Contributions (NICs) will increase by 0.5 per cent in April 2011. This is in addition to the 0.5% increases to rates already announced, making a 1% increase in total from 6 April 2011.