Key points
- Furlough to be extended until the end of September
- Employers to be asked to contribute 10% in July and 20% in August and September
- Minimum wage to increase to £8.91 an hour from April
- No changes to rates of income tax, national insurance or VAT
- Corporation tax on company profits to rise from 19% to 25% in April 2023
- Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
- Tax breaks for firms to “unlock” £20bn worth of business investmentFirms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
- Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
- Fuel duty frozen for 11th consecutive year
No surprises in Chancellor Rishi Sunak’s budget statement which was largely aimed at kick-starting the economy come the end of lock down.
The downsides for business were few, such as the increase in Corporation Tax, and there were welcome new measures to encourage apprenticeships as well as an extension to the business rates holiday until June.
What particularly resonated was fuel duty freeze, seen as a positive move that will benefit motorists and support personal mobility as more people return to work and seek to avoid public transport, giving greater importance to car ownership.
Brian Madderson, Chairman of the Petrol Retailers Association (PRA), said: “As the PRA has campaigned heavily against any rises in fuel duty, we naturally welcome the Chancellors decision. Fuel duty is a regressive tax on business and livelihoods so any attempt to increase it would have been entirely counter-productive as the economy gets back on track.
“It is by no means an over-exaggeration to say our members have kept this country moving during the pandemic and it is right that the Government has recognised that undeniable fact.”
Ashley Barnett, head of fleet consultancy at Lex Autolease, commented: “An alternatively-fuelled future simply can’t happen overnight. The affordability of EVs is a key barrier towards mass adoption and for some people, an ICE vehicle remains their only option.
“Against the backdrop of the pandemic, many people are still using cars as a safer mode of transport and any rises would feel counterproductive at this moment in time. As momentum continues to shift away from petrol and diesel, a future rise in the 10-year fuel duty freeze feels inevitable and will help fund investment in greener alternatives.”
On a more general note, Paul Hollick, chair of the Association of Fleet Professionals, said:
“This was a Budget that, from a fleet industry point of view, was much more important for its broad macroeconomic sweep than for any detail issues. Yes, we’d like to see indications of more work happening at the Treasury in areas such as the future of benefit-in-kind taxation for company cars and vans, as well as wider transport issues such as road charging, but the crucial thing for the moment is that businesses continue to be financially supported through the historically tough economic conditions that we are all facing.
“On that front, the Chancellor appears to have delivered although only someone who hadn’t been paying attention to the coronavirus crisis so far would bet against further, targeted help being needed in the future. One point of note are the plans for freeports around the UK which, if successful in terms of generating manufacturing, could become hubs of quite intensive fleet activity.”
