Fleet News

Plea for a fleet friendly Budget

FLEET industry leaders have urged Chancellor of the Exchequer Gordon Brown to issue a 'business-friendly' Budget next week amid fears he could push up taxes to fund a growing hole in Government finances.

Company car operators have asked for a long-term tax guide to help them plan their business strategies, but Fleet NewsNet understands from insiders that the Government will only announce the company car tax rates for 2005/6 in Wednesday's statement. It is widely expected the 15% starting band for carbon dioxide-based company car tax will fall from 145g/km in 2004/5 to 135g/km the following year.

A source at the Inland Revenue told Fleet NewsNet future changes were being announced a year at a time, so that the Government could monitor the effect of company car taxation and introduce changes relatively quickly.

The decision seems to fly in the face of calls from the Association of Car Fleet Operators (ACFO) for help with long-term strategies. ACFO director Stewart Whyte said: 'Mid-term uncertainty must be clarified so fleet managers can refine their vehicle allocation policies and listings.'

It warned that manufacturers would struggle to keep up with toughening emissions-based tax thresholds, as they are only committed to reducing average CO2 emissions for new cars to 140g/km by 2008 under a European-wide agreement.

Whyte added: 'Driving the company car tax regime ahead of what vehicle manufacturers can realistically deliver could be very harmful.'

The Society of Motor Manufacturers and Traders (SMMT) has also added its voice to industry calls for a business-friendly Budget. A four-point plan for business from the SMMT has asked for no increase in business taxes, no increase in mainstream fuel duties, a full review of changes to company car tax and its effects and a duty reduction on petrol used for research and development testing.

SMMT chief executive Christopher Macgowan said: 'The Chancellor of the Exchequer's commitment to positive tax regimes and economic stability over recent years must be maintained in order to keep Britain's position as a leading global player in the industry.'

As well as company car tax, the Association of Car Fleet Operators is calling for Brown to reveal the future shape of the CO2-based fuel scale charge system that comes into effect on April 6, to establish how it might change next year.

ACFO also warned that it expected Vehicle Excise Duty rates to increase in some bands as the Government attempts to encourage drivers to opt for cleaner cars. Industry leaders have also called for a statement in the Budget on the future shape of van taxation.

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