Emergency budget: industry comment

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22 June 2010

Comments from Rob Ingram, Director of Business Rental at Enterprise Rent- A- Car:

“This budget has done exactly what it promised to do – make major cuts to a broad cross section of departments and industries, to improve the fiscal deficit. Whether it will do this by 2015 as promised, we will just have to wait and see, but as an Emergency Budget, we can take some positives from this, particularly the drop in corporation tax and the guarantee that capital spending won’t be cut. However, the public sector has taken a major hit today, and the drastic cuts that will continue until 2015 will have a major impact on how these services are run and managed.

“This age of austerity brings with it a need for creativity in business and as these measures take hold, it is imperative that we maintain innovation in business to understand how to work with the public sector to increase savings through alternatives to mileage reimbursement, combat the increases in VAT and assist the private sector through highlighting tailored rental offerings that will help make cost savings.”

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adamrollins - 25/06/2010 09:29

VAT is the obvious easy target for the chancellor. In business we all collect the tax for him. Between the VAT reduction to 15% to "stimulate the economy" we ar
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adamrollins - 25/06/2010 09:48

VAT is the obvious, easy target for the chancellor. In business we all collect the tax for him. No political point to make here, it's just a fact. So, since the previous government's VAT reduction to 15% to "stimulate the economy" we are now collecting an extra 33% VAT for the current government. With such a significant increase, it becomes more important not to get caught out with incomplete records for HMRC in terms of VAT recovery. If company fleet records are not accurate and thorough, demonstrating the clear split between business and private miles, then VAT will fall due on legitimate business mileage that just has not been properly accounted for. Worse, if it is not possible to demonstrate the vehicle has been 100% utilised for business miles, what will the additional VAT implications be then? The only answer is to keep complete and accurate records of every journey. Complete mileage management. Systems like MIDAS-FMS can be very cheap to run, fully on-line and will actually cut the administration required for fuel expenses rather than add another layer of complicated processes. Make sure you get your records right to minimise the adverse aspects of the VAT changes!
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