THE date for one of the most important Budgets to affect fleets in recent years has been announced by Chancellor of the Exchequer Gordon Brown.

This year's Budget will be on March 17 and will be Brown's eighth since Labour won power in 1997.

Some economists claim the Government may have to raise taxes to meet its spending plans. The impact this would have on vehicle taxes is unclear, but Brown gave fleets an indication of what to expect in his pre-Budget Report last year.

One of the biggest announcements will be a new van taxation regime, which will introduce a form of emissions-based taxation.

The Government already has final recommendations from the Inland Revenue on the shape the tax should take, but ministers are still finalising the details of the new tax. Currently, drivers who have private use of their vans pay tax on a standard tax charge of £500 a year, but the new tax regime could increase taxes for older or high-polluting vans.

Brown will also announce major changes to taxation on alternative fuels, which will see subsidies for liquefied petroleum gas reduced over a three-year period.

The new fuel scale charges for drivers who receive free fuel for private mileage will also be announced.

Currently, drivers pay tax on a percentage of the benefit, currently £14,400, defined by their cars' emissions, in the same way that company car tax works.

Industry insiders suggest this year, the £14,400 tax charge will remain the same, but tax experts at Ernst & Young pointed out that because the charge is based on company car tax, there will be an increase for many drivers.

For example, a driver whose vehicle produces 190g/km of CO2 would pay tax at the basic rate on 22% of £14,400.

But for the 2004/5 tax year, a car producing 190g/km would incur tax at 24%, a 9% increase.

Brown is also expected to announce the Vehicle Excise Duty bands for next year, an annual rise in fuel duty and further incentives for bio-fuels.

  • Fleet NewsNet will be offering immediate coverage of the Budget statement and analysing key points affecting fleets and offering full analysis in its March 25 issue
  • Expert advice on the Budget will be provided by Fleet News at its Spring Conference on March 31. The Safety and Numbers conference, in association with Nissan, will take place at the Heritage Motor Centre, Gaydon, Warwickshire, and will also focus on the latest issues affecting fleet safety.

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