Fleet News

Pre-Budget Report 08: Initial feedback - Zenith Provecta

Andrew Cope, chief executive of Zenith Provecta, said:

"The PBR will provide hard-pressed fleets with cheaper running costs, at least in the immediate future.

"We particularly welcome the temporary reduction in VAT announced , which will be good news for most employers.

"New car acquisitions will be cheaper.

"Cars under existing contract hire agreements will also be cheaper until 2010 as the monthly rentals will benefit from lower non-recoverable VAT.

"This move is also good for new cars in ECO schemes as they will save the full cut in VAT on the purchase price as well as lower maintenance costs.

"The re-think on Vehicle Excise Duty will have less of an impact on the fleet market as this is more of a benefit to the retail market than employers operating fleets of vehicles.

"The vast majority of Zenith’s customers are already in environmentally efficient vehicles so this will have little impact on the average fleet.

"The sting in the tail of this ‘mini-emergency budget’ is the forthcoming rises in fuel duty.

"While the majority of next Monday’s 2p rise in duty will be off-set by the 2.5% cut in VAT, the chancellor is clearly banking on further falls in fuel prices at the pumps.

"The proposed increase of 1.84 pence per litre in April 2009 will be followed by the re-introduction of the full 17.5% VAT rate in January 2010 and a further 0.5p per litre ‘above indexation’ in April 2010.

"Only time will tell if the expected lower fuel prices materialise or this becomes a tax on business doing business."

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