Guidance

Autumn Statement 2015

The Chancellor has made his annual Autumn Statement, and set out the Government's spending plans for the next three year cycle, as part of the Comprehensive Spending Review.

The BVRLA has produced a summary of the key points of interest to members.

Corporation Tax
Since 2010, the headline rate of corporation tax has been cut from 28% to 20%. This will fall to 18% by the end of this Parliament, as announced before the election.

Company Car Tax
The 3% differential between diesel and petrol cars will remain the same until 2021, in order to take account of the delay in the introduction of new and further EU emissions testing procedures.

BVRLA Comment: We’re disappointed with the Chancellor’s decision to defer the removal of the 3% diesel supplement on benefit in kind tax bands. This move will penalise company car drivers for decisions they have already made, based on the Chancellor’s 2012 announcement that the supplement would be lifted in 2016. What is especially frustrating is that many of these motorists are being penalised for driving some of the latest, safest, most fuel-efficient vehicles on UK roads.

The following fact sheets have been updated following this announcement:

Company car taxation fact sheet

Company van and fuel taxation fact sheet

Fuel benefit charge tax fact sheet

Capital Allowances
The Government will amend current legislation to counter tax avoidance, involving capital allowances and leasing, which involve businesses artificially increasing the value of their capital allowances or lowering the amount of tax which they pay.

Ultra-Low Emission Vehicles
The Government will invest over £600 million between 2015-16 and 2020-21 to support uptake and manufacturing of UK ultra-low emission vehicles (ULEVs).

BVRLA Comment: The BVRLA welcomed the extra money that was announced for the Transport System Catapult, as this will support innovation in Intelligent Mobility technologies and business models. We now eagerly await news on how the government will continue to support Ultra Low Emission Vehicles – we are particularly keen to hear about the future of the Plug-In Car Grant.

Roads Investment Strategy
£61 billion will be invested in transport over the Parliament, including £13.4 billion to continue to deliver the Roads Investment Strategy. This will include:

  • Resurfacing over 80% of the strategic road network, and delivering over 1,300 miles of additional lanes
  • An additional £250 million over five years to fix potholes
  • Future roads investment will be subsidised through a new Roads Fund paid for by Vehicle Excise Duty from 2020-21. A second Roads Investment Strategy will be published before the end of this Parliament, detailing how this Fund will be invested

Departmental spending
Day-to-day expenditure by the Department for Transport will be cut by 37%, with efficiency savings including:

  • The DVLA’s continuing move to digital services saving an additional £94 million over the current Parliament
  • Moving several services and costs incurred by DVSA to a chargeable fee basis (further details to follow)
  • Moving Transport for London to the basis of a capital funded organisation, with the resource grant being phased out. This will save £700 million in 2019-20, which will be made up though efficiency savings on the part of TfL, and generating additional income through the 5,700 acres of land which TfL owns in London.

BVRLA Comment: The BVRLA is also concerned that a 37% budget reduction for the Department for Transport (DfT) will result in costs being transferred onto the fleet sector. What will the DfT have to stop doing to achieve these savings? While we welcome the announcement that companies will benefit from more efficient digital systems, the government must not compromise on the quality or delivery of these services to save money.

Fuel Duty

It is thought likely that fuel duty will increase next year. The Chancellor did not mention fuel duty in his Autumn Statement, effectively maintaining the status quo that has meant no duty rises in five years, the freeze could end next April. Within the Spending Review document is a forecast that fuel duty will increase by £2.3bn from 2015/16’s level of £27.4bn to £29.7bn in 2020/21. The Office for Budget Responsibility (OBR) has confirmed this is based on "the assumption" that standard government policy is to uprate fuel duty rates in line with the Retail Price Index (RPI) inflation each year from April 2016.

It could therefore be assumed that in the absence of a statement to the contrary from the chancellor - who cancelled the increase due for September 2015 in his July Budget - fuel duty will begin to increase from April next year.
 

Salary Sacrifice

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. 

Devolution
The Government will also continue to devolve further transport powers to Mayor-led city regions, including Greater Manchester, Sheffield City Region, Liverpool City Region, the North East, Tees Valley and the West Midlands.

The full Comprehensive Spending Review and Autumn Statement document can be read online.

Previous BVRLA Budget Summaries are available here:

Budget Summary - Summer Budget 2015

Budget Summary - Budget 2015

Budget Summary - Autumn Statement 2014

Budget Summary - Budget 2013