Brexit and Budget 2016: how motorists may be affected
With Mr Osborne set to deliver his 2016 Budget in less than a fortnight’s time and with debate roaring over Brexit, what are the possible implications for contractors and other business drivers?
In February, the BVRLA – the trade body for the car leasing industry – claimed that since 2010 the government’s company car taxation policies have exposed road users and indeed society as a whole to dirtier, more dangerous vehicles. Gerry Keaney, the BVRLA’s Chief Executive, labelled Mr Osborne’s “series of tax increases as both unfair and unsignposted”, pointing to 30,000 fewer employees who have chosen company car packages over the last five years.
His organisation is strongly urging the government to make reforms to Benefit in Kind (BIK) bandings and to reduce the tax payable on vehicles fitted with Autonomous Emergency Braking Technology, along with Ultra-Low Emissions Vehicles (ULEVs) and electric cars, for which it is suggested that a new tax category should be created. Abolition of the 3% diesel supplement for Euro 6 emissions-compliant cars is also a BVRLA recommendation, partly to minimise the impact of the 2% company car tax increase set to be introduced for the 2017-18 financial year onwards.
Leaseplan, one of the companies worked with by our car leasing partners at Vehicle Consulting, echo these sentiments. “The way the Government used the emissions scandal as a reason for postponing the removal of the surcharge was dreadful”, comments Matthew Walters, head of consultancy, who claims Mr Osborne is treating business drivers “like cash cows.”
Motorists are also pondering how they will be affected if Britain leaves the Euro. US bank Goldman Sachs predicts that the value of sterling will fall by 20% if Brexit is voted in favour of, which the AA claims will leave two-car families handing over an additional £494 each year for petrol. Many business drivers will therefore also be relatively affected by rising fuel costs in the wake of Brexit, making it a factor to bear in mind when contemplating buying a new 16-plate car or leasing one on business or personal contract hire.
Contractors intent on driving the most environmentally-friendly cars on a budget may welcome news from Peugeot that its latest 208 emits just 79g/km CO2, which the French firm claims makes it the least-polluting car on sale today, excluding hybrids and electric vehicles.
For advice on whether leasing a car is right for your business and financial circumstances, contact one of the friendly advisors at Umbrella’s car leasing partner, Vehicle Consulting of Manchester, who work with contractors, SMEs and larger business fleets throughout the UK. Umbrella.co.uk