Spring Budget: What does it mean for the motor industry?

4:18 pm, March 8, 2017

A NUMBER of announcements impacting on the motor industry were contained in today’s Budget.

Many tax measures, including those relating to company car benefit-in-kind tax to the end of 2020/21, Vehicle Excise Duty for cars first registered from April 1, 2017; capital allowances; car fuel benefit charge; van benefit charge; van fuel benefit charge and Insurance Premium Tax had been previously announced.

However, here’s what Philip Hammond had to say that was new this afternoon.

Fuel duty – frozen again in 2017. It is the seventh consecutive year that there has been no increase.

Vehicle Excise Duty (VED) – from April 1, 2017, VED rates for cars and vans registered before April 2017 increase by the rate of inflation.

Corporation Tax – the main rate will reduce to 19 per cent from 20 per cent in April 2017 before being cut again to 17 per cent in 2020/21.

Air quality – the government is committed to improving air quality, and will consult on a detailed draft plan shortly which will set out how the UK’s air quality goals will be achieved. Alongside that, the government will continue to look at tax treatment for diesel vehicles, with changes being announced in the autumn.

Driverless car technology – an investment of £270 million to keep the UK at the forefront of so called ‘disruptive technologies’ which include driverless vehicles as well as biotech and robotic systems.

Investment to ease traffic congestion – £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch-points on the national road network.

Reacting to the Chancellor’s statement, Mike Hawes, chief executive of the SMMT, said: ‘UK Automotive plays a critical role in the country’s economy but future success will depend upon maintaining competitiveness.

‘It’s disappointing, therefore, that the Chancellor hasn’t prioritised additional funding for supply chain development, nor addressed the flaw in business rates that disincentivises investment in plants and machinery.

‘On a more positive note, the focus on technical education is welcome, as we seek to fill the 5,000 vacancies that exist in our sector and invest in skills to improve productivity still further.’