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A BUDGET that boosts environmentally-friendly vehicles, freezes fuel duty, makes future planning easier and even helps fill in pot holes.

Chancellor Rishi Sunak’s budget was generally greeted with industry enthusiasm as he announced the government’s decision to:

  • Maintain support for the plug-in car grant.
  • Remove the VED surcharge for EVs
  • Increase finding for rapid charging hubs
  • Freeze fuel duty
  • Publish company car tax rates beyond 2023
  • Boost funds to fill in pot holes

Justin Benson, UK Head of Automotive at KPMG, said: “The Government’s willingness to support clean vehicle technologies to improve air quality and the environment is important.

“Whilst regulation is already in place for cleaner vehicles on the road, cutting taxes on these is the right way forward, particularly to boost consumer demand. This will also encourage car manufacturers to develop these cleaner technologies more quickly.

 “Another boon for the sector is the £500m announced for car charging hubs, which should help to alleviate range anxiety for consumers interested in electric vehicles.”

Lex Autolease also welcomed the government’s decision to keep the plug-in car grant in place until at least 2022/3. It believes as plug-in vehicles move towards parity with traditionally-fuelled vehicles, government funding can be reduced and ultimately phased out.

On the removal of the VED surcharge for EVs, Ashley Barnett, head of fleet consultancy at Lex Autolease, said the move will encourage uptake, many of which have list prices higher than the £40,000 threshold.

“The threshold was put in place to identify and apply a surcharge to ‘luxury’ cars, but as times have changed, even entry-level models featuring the newest, cleanest engine technology can come with a similar price tag.

“It’s positive that early adopters of EVs are being incentivised by these changes, rather than being penalised by an outdated tax system.”

A lack of EV charging infrastructure is still one of the main stumbling blocks for consumers thinking about making the move to an EV, so the Chancellor’s decision to increase the funding available for rapid charging hubs is a welcome step in the right direction.

However, commentators said incentivising workplace and domestic charging points need to remain firmly on the agenda.

The publication of company car tax rates beyond 2023 is a shot in the arm for the fleet market and gives decision makers the clarity they need to invest in greener fleets now.

Eduarda Thomas, principal consultant at Lex Autolease, said: “Fleets typically plan in 5-10-year cycles, and confident purchasing decisions cannot be made without sight of future tax liabilities.  We are optimistic that the lack of clarity in recent years is behind us and hope that five-year visibility is maintained in the years to come.

Claire Evans, head of fleet consultancy at Zenith said: “The fleet industry will take real confidence from the confirmation of benefit-in-kind (BiK) tax rates and the further announcement they will be frozen at 2022/23 levels for an additional two years.

“It gives the industry the certainty it needs and provides a commitment to low rates for drivers of EVs.

“The Chancellor set out wide-ranging measures that will help businesses and consumers maximise move to electric and alternative-fuelled vehicles with increased certainty.

“Significantly the extension of plug-in grants to 2022/23 and the removal of the expensive car supplement for EVs from April 2020, which equates to £27 a month at current rates.

“Along with the fiscal incentives, it is good to see an increase in infrastructure investment with a total of £1bn promised to fund green transport solutions, and £500m to support the rollout of new rapid charging hubs so that drivers are never more than 30 miles away from being able to charge up their car.

“The Chancellor’s announcements will be welcome by fleet operators as it helps them address their bold ambitions to transition to cleaner technologies and provides drivers with the reassurance they need when adopting electric vehicles for the first time.”

Matthew Walters, Head of Consultancy at Leaseplan UK, said: “At last, after much prevarication from the last government, along with a delay caused by the general election, we finally have confirmation of the rates of Company Car Tax for the next few years.

“In truth, these rates are not surprising – they were announced last July but weren’t signed into law – yet they are still historic and welcome. For the first time, the cleanest vehicles will pay no CCT at all, and we now know that the rates will be frozen at their 2022-23 levels until 2024-25.

“This is the clarity we have demanded for years.

“The system of Vehicle Excise Duty has also been changed to encourage cleaner motoring: zero-emission vehicles will be exempted from the ‘expensive car’ supplement.

“It’s less good news that, in a few short weeks’ time, VED will be uprated in line with inflation – but, given that the Chancellor has also frozen Fuel Duty for another year, we cannot complain too loudly. This Budget was kinder than fleet professionals might have expected.”

David Brennan, Chief Executive of Nexus Vehicle Rental, said: “As we come to terms with the implications of Brexit, including the political and economic ambiguity of the last few years, we are now facing continued uncertainty surrounding the spread of Coronavirus and its impact on the country.

“The Budget announcement highlights the need for businesses to remain flexible, agile and adaptable and we are positive that emergency measures to protect the health and well being of the UK population will support individuals and businesses as we face this new challenge.

Whilst looking after the well being of our workforce, clients and suppliers’, the priority for the business will remain in delivering great service and keeping people and goods mobile, wherever and whenever it is safe to do so.

“We welcome the Chancellor’s announcement that there will be a £500 million investment in the charging hub roll-out for electric vehicles, as it has been clear for some time that the UK’s infrastructure requires further support to propel businesses and consumers towards the adoption of greener mobility solutions.”