Fleet News

Budget 2004: Industry gives verdict on Gordon Brown's speech

LEADING figures in the fleet industry give their opinions.

Nigel Underdown
Head of customer relation-ships, Bank of Scotland Vehicle Management
'The 2004 Budget seems to have accepted that the tax on the company car driver is high enough. However, we continue to be sceptical about the lack of joined-up thinking on road fuel gas policy (LPG).'

Sean Bingham
Director of Godfrey Davis (Contract Hire), corporate division of Bank of Scotland Vehicle Management
'Drivers have certainty for the next three years, which can't be said for many other aspects of personal taxation. Equally, employers will be pleased that they don't face even larger increases in their National Insurance contributions.'

Edmund King
Executive director, RAC Foundation
'Motorists will welcome Brown putting the brakes on fuel duty and freezing VED but will be watching out for potential penalties on the road ahead. Motorists will be looking for evidence of better transportation before they pay more taxation. They already pay over £43 billion in motoring taxes whilst only £6 billion is spent on roads. This budget will give a welcome 'tax-brake' for motorists.'

Nigel Stephens
Chairman and chief executive, VELO
'There were few surprises for fleet operators, as might be expected for a potential pre-election Budget. While there was little - positive or negative - to take the breath away, there remained a sense that the sting in Brown's 2004 fiscal plans may emerge further down the road. This is a budget which company car drivers can feel cautiously pleased about, but following the election, the day of reckoning may simply have been delayed – particularly where fuel duty is concerned.'

Nick Brown
Managing director, Black-i Vehicle Management
'The Government's decision to freeze company car tax in 2006/2007 at the already announced 2005/06 levels is good news for all company car drivers. It means that company car drivers can calculate their tax bills for the following three years. However, vehicle replacement cycles are lengthening from a traditional three-year period well into a fourth year. As a result I would urge the Chancellor to announce company car tax scales for a period of four years which would remove all tax uncertainty for drivers.'

Christopher Macgowan
Chief executive, Society of Motor Manufacturers and Traders
'The Budget extended the chancellor's principles of economic stability to motoring taxation. We welcome incentives for zero sulphur fuel, a freeze in Vehicle Excise Duty and no change to company car tax thresholds in 2006/2007. However, the Society of Motor Manufacturers and Traders remains concerned that one of the biggest factors fuelling uncertainty for both manufacturers and investors in the UK has not been addressed, with the news that assessment on Euro entry will be delayed for another year.'

Gavin Keer-Keer
Finance manager, business development, Interleasing
'This is a clever and well balanced budget, which manages to maintain revenues while appearing benign to road users in general. The apparent 'giveaway' of freezing CO2 rates for benefit-in-kind tax hides the fact that new car list prices have increased by 2% this year, a change in the trend of the last three years.'

Philip Harvey
Philip Harvey Consultancy
'Whether the announcement to cut down on tax evasion will catch any car benefit-related schemes remains to be seen. The detail will be published in the Finance Bill, and schemes for the evasion of employment taxes are known to be an Inland Revenue target.'

Mike Waters
Head of market analysis, Arval PHH
'Businesses will welcome the freeze on Vehicle Excise Duty, company car tax and the fuel benefit charge on free private fuel. The Government has clearly recognised the environmental as well as health and safety benefits of the company car.'

John Lewis
Director general, British Vehicle Rental and Leasing Association
'The Government has been listening to what industry has had to say to it and has taken appropriate action as announced in today's Budget. It is a stance that, while unusual, is certainly welcome.
We have seen a sea-change in the way that government is approaching measures that affect the motorist and while it may have something to do with an election in a year or so, it is nonetheless welcome. The Chancellor of the Exchequer has listened to what industry, ourselves included, has told him.'

Stewart Whyte
Director, Association of Car Fleet Operators
'The Chancellor of the Exchequer outlined numerous measures in the Budget to crackdown on tax avoidance schemes. While he made no mention of 'alternative' company car schemes, ACFO believes they could be on his agenda. He introduced a new disclosure measure to counter what he called 'large-scale avoidance of direct taxes'. He has fired a warning shot across the bows of the fleet industry. Whether various alternatives to company car schemes are classed as tax avoidance, remains to be seen.'

Neil McCrossan
Vice president, sales and marketing, National Car Rental
'It's clear that with higher taxation on company car drivers, cash for car schemes are set to become even more popular. Whilst this may seem like a win-win situation for the business and employee, it is the responsibility of the employer to ensure that a vehicle being driven for business is fit for its purpose, adequately insured and covered by roadside assistance. This is not only a huge administrative burden but raises the issue of corporate responsibility which has to be a major concern for any company, particularly in today's highly litigious environment.'

Help online
www.inlandrevenue.gov.uk
www.treasury.gov.uk
www.hmce.gov.uk

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