Businesses are missing the message underlined in the Budget: low CO2 emission business cars will cost your business, and drivers, less. GE’s John Kelly reports.
TOO many businesses are still missing the message behind ongoing government policy underlined in the Budget: choosing lower CO2 company cars will reduce costs for employers and their drivers.
These include new changes to the Company Car Taxation scale – this encourages drivers into more environmentally friendly company cars; revisions to the Vehicle Excise Duty scheme; and notice that Fuel Duty would be rising.
These are all clear indications that the government will continue along the policy it has promoted over several years – a push towards gradual but ever lower CO2.
However, at GE Fleet Services we still frequently find ourselves sitting in front of employers – both small and large – who have missed this point.
What these companies have failed to realise is this.
Whichever party is in power, we are likely to see a process whereby the taxation regime – through a combination of carrot and stick – will promote ever lower CO2 company vehicles.
Companies that have failed to acknowledge this fact will, following the Budget, be facing much higher company car running costs than those which have already made changes. And, we suspect, many will already be working out how they are going to catch up.
Other indications from the Budget seemed to suggest that we can expect to see similar incremental moves on emissions in years to come. Note especially the Chancellor’s statement that the government is aiming to cut UK CO2 emissions by 35% by 2020.
This is an ambitious reduction towards which business travel will be expected to contribute. Business cars will certainly have to play their part. This will undoubtedly lead to ever tougher tax measures.
For the moment, the main opportunity presented by the Budget for business car managers is one that was widely publicised before the Chancellor stood up – the new sub-160g/km CO2 rule for writing down allowances. This change does present companies with a genuine opportunity to contain their business car running costs – provided they seek out the right expert advice.
