Fleet News

Budget 2008: what you need to know

All the budget 2008 announcements that will affect fleets and their drivers.

 

  • From April 6, 2010, the 15% company car tax band will be lowered from 135g/km to 130g/km.
  • The basic income tax rate will drop from 22% to 20% from April 6 this year. The 40% tax rate remains unchanged.
  • April 6, 2008 sees the introduction of a 10% band for company cars with CO2 emissions of 120g/km or less.
  • Employees who choose sub-120g/km cars will win twice over - through the income tax rate cut, and the April 6 introduction of the 10% company car tax rate on cars emitting 120g/km or below (13% for diesel cars).
  • Company cars capable of running on E85 will receive a 2% company car tax discount from April.
  • The AMAP rates remain unchanged
  • The fixed figure on which the fuel benefit charge paid by employees who drive company cars and receive ‘free’ fuel for private use is based will rise from £14,400 to £16,900 from April 6.
  • From April 6, 2009, the multiplier would increase at least in line with inflation.
  • The move is designed to enhance the environmental incentives to drive fewer miles, according to the Government.
  • There will be changes to the existing van fuel benefit legislation so that it mirrors that for company cars. The changes will ensure that reimbursement of private fuel is not treated as earnings for tax purposes and that the same rules have effect for the provision of van fuel for private use as those that currently have effect for company car fuel
  • From April next year, VED rates will be reformed into 13 bands. Band A – the cleanest cars - will not be liable for VED. However cars that produce more than 255g/km (bands G to M) will be pay up to £950 for their first year’s road tax and then up to £455 every year after.
  • The VED rate for Euro4-compliant LCVs is £120. The standard rate is £180. From January 1, 2009, a VED incentive to encourage the take-up of Euro5-emission diesel vans ahead of its mandatory introduction in 2011 will be introduced. The rate has not been announced.
  • The 2p a litre fuel duty increase has been postponed until October 1.
  • Fuel duty will rise again by 1.84p a litre on April 1, 2009.
  • There will be a further 0.5p a litre fuel duty rise on April 1, 2010.
  • From April 2009, capital allowance of all cars will be reformed. Expenditure on cars with CO2 emissions above 160g/km will attract a 10% writing down allowance and expenditure on cars with CO2 emissions of 160g/km or below will attract a 20% WDA.
  • From April 1, 2009, leased cars emitting more than 160g/km will have 15% of the relevant payments disallowed.
  • The 100% first year allowance for the cleanest cars will be extended to March 31, 2013 and the qualifying CO2 emissions threshold will be reduced to 110g/km from 120g/km.
  • From May 1, 2008, the VAT fuel scale charges will be increased to reflect fuel price inflation. In addition, the table of emission bands will be amended to maintain alignment with those used for direct tax purposes. Businesses must use the new scale charges from the start of their next prescribed accounting period beginning on or after
  • A new fund to explore national road pricing is to be established.
     

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