Instead, from April 2013 they will only be able to write down 18% of the cost, as long as the car’s CO2 emissions are below 130g/km.

Fleets, however, will still be able to take advantage of the 100% first-year allowance, although the level at which this becomes eligible falls from 110g/km to 95g/km.

This could make buying low emissions vehicles more attractive than leasing them on conventional contract hire agreements.

John Lewis, chief executive of the BVRLA, said: “We are due to meet with Treasury officials this month and will remind them that all the benefits of these allowances would continue to flow through to business end-users, as they do now.”

Fuel duty increases

The Government has cancelled the 3.02p per litre fuel duty hike that was planned for January 1, and deferred the 2013/14 increase to September 1.

For the remainder of the Parliament, subsequent increases will also take effect on September 1 each year, instead of April.

ACFO chairman Julie Jenner welcomed the chancellor’s announcement, but was
disappointed he hadn’t gone further. She said: “The chancellor could have truly kick-started economic recovery by cutting fuel duty with immediate effect.

“Pump prices are already at, or close, to record levels, and while the decision on duty will not immediately increase fleet costs, the chancellor has done nothing to reduce the cost of fuel for employers and private motorists.”

However, since 2011 the Government has abolished the fuel duty escalator, cut fuel duty and frozen it at the new lower rate. As a result, it argues pump prices are currently 10ppl lower than they would have been under the previous Government’s plans.

George Osborne told MPs:

“It means that under this Government we’ll have had no increase in petrol taxes for nearly two-and-a-half years.”

Future increases planned for September 1 each year will be based on the ‘fair fuel stabiliser’ where duty rises in line with RPI inflation when oil prices are above £45 per barrel, but increases by RPI+1ppl when they are below that figure for a sustained period.