Fleet News

Budget 2004: Big Budget freeze - but fleets still feel the heat

A 'STEADY as she goes' pre-election Budget from Chancellor of the Exchequer Gordon Brown meant little changed for most of the country – but the impact on fleets was much greater.

Despite an unprecedented freeze in tax rates for company cars, along with a freeze on the value of free fuel for private mileage, a temporary freeze in fuel duty until September and a freeze on Vehicle Excise Duty, there is still a lot for fleets to chew over.

Some of the biggest changes came in the commercial vehicle sector, where a new tax system was introduced that will benefit many, but will lead to massive increases for a few van drivers.

Brown revealed the plan with a claim the changes would actually take 85% of van drivers out of the van tax system altogether.

There are also major changes to taxation of road fuel gases, while the September rise in fuel prices needs to be included in fleet financial plans.

There will also be consultation on future treatment of other alternative fuels, including biofuels.

Other changes affecting employers include frozen rates of corporation tax, capital gains tax, insurance premium tax and betting levies.

The VAT threshold for small businesses rose to £58,000 and venture capital trust relief was extended to top rate taxpayers for investments of up to £200,000. Anti-avoidance provisions were also announced for partnerships, finance leases and VAT.

Brown also announced major savings with swingeing job cuts for civil servants, cutting up to 40,000 jobs to save about £20 billion.

There was also a delay to plans for lorry road-user charging - a pre-cursor to road-user charging for cars - following the collapse of a scheme in Germany.

Brown said: 'The purpose of this Budget is to lock in an economic stability that can and will endure.

'I can now report that Britain is enjoying its longest period of sustained economic growth for more than 200 years…the longest period of sustained growth since the beginning of the industrial revolution. Now and into the next parliament, our prudence is for a purpose.'

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