Fleet News

Budget 2002: key points for fleet decision makers

Crucial points for fleet decision makers

  • from April 6, 2003 fuel scale charges will be based on CO2 emissions with a 3% supplement for diesels and discounts for alternatively fuelled cars. Emissions bandings will be the same for company car tax. The amount on which tax will be paid will be announced in successive years. Inland Revenue says change will be 'revenue neutral'.

  • all businesses will be able to claim 100% enhanced capital allowances on the amount they spend on the purchase of new low emission cars and equipment for refuelling vehicles with natural gas or hydrogen fuel.

  • exemption from tax and national insurance contributions on transport provided by employers for employees from home to work. At the moment applies to buses with 12 or more seats. Extended to minibuses with 9-11 seats.

  • freeze on all fuel duties, including ultra-low sulphur petrol and diesel, lowering duty rates by around one pence per litre 'in real terms'. Introduction of new duty incentives in 2003 to promote sulphur-free fuels, subject to 'European approval'. Hydrogen as a vehicle fuel to be exempted from duty 'in the future'. Proposal of new rate for biodiesel at 20 pence per litre below ULSD.

  • Duty on liquified petroleum gas and compressed natural gas road fuels frozen.

  • enhanced capital allowances for investment in CNG and hydrogen refuelling infrastructures.

  • freezing of vehicle excise duty rates, introduction from May 2002 of new discounted rate for the 'most efficient cars', offering a £30 discount for cars producing less than 120g/km. Within this band, the VED rate for cars using alternative fuels will be £60 a year, for petrol cars £70 and for diesel £80.

  • changes to VED for vans, including a new discounted rate for LCVs which meet the Euro IV emission standard, set at £105 from March 2003. Discount will be reviewed in the run-up to this becoming mandatory in 2006. Other van-related VED charges frozen.

  • introduction of a new payment of five pence per mile for drivers carrying passengers on business trips. This can not be taken off NIC or tax contributions.

  • one per cent rise in national insurance contributions paid by employers, employees and self-employed on all earnings above the NICs threshold of £89 a week from April 2003.

  • further tax incentives to encourage business to invest in energy-saving technologies.

  • a reduction in the starting rate of corporation tax from 10 per cent to zero and a one per cent cut in the small companies' rate.

  • a new tax credit to boost research and development (R&D) by large firms, complementing the tax credit already available for small firms.

    The ideal place to learn the full implications of the Chancellor's announcements on your fleet is the Fleet News Budget Briefing taking place on April 23 at the Oxford Hotel, Oxford.

    For speaker details and online booking click here.

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