Fleet News

Budget: GE Capital UK comments on measures affecting fleets

Gary Killeen (pictured), fleet services commercial leader for GE Capital UK, comments on the Budget.

New 50g/km and 51-75g/km company car benefit in kind tax bands

Killeen said: “The new sub-50g/km and 51-75g/km bands will be charged at 5% and 9% respectively in 2015-16 and then at 7% and 11% in 2016-17.

“Despite the push on ultra-low emission vehicles, these are attractively low taxation rates but currently there are very few company cars that can achieve these figures, especially in the sub-50 bracket. 

“We believe, therefore, investment in low-emitting technologies yet until these products flow through to the market, mainly in the 51-75g/km band, relying largely on the new generation of hybrids, the benefits won’t be seen.

“If they are able to do so, fleets and their drivers stand to benefit from a very low rate of taxation in the medium term.”

Changes and clarifications on writing down allowances

Killen said: “The reduction of the first year zero per cent writing down allowance from 95g/km to 75g/km starting in April 2015, taken together with the new 51-75g/km benefit in kind taxation rate, perhaps indicates that 75g/km is the new ’achievable’  low emission CO2 figure for fleets.

“Whether this is accurate depends very much on the ability of manufacturers to produce viable company car options that can meet this target.

“Also, we very much welcome the news that the standard 130g/km writing down allowance that was unveiled in the last Budget has been set in stone until 2016, when it will be reviewed. This will allow fleets to plan for the next three years with a high degree of financial certainty.”

Freeze in fuel duty

Killeen said: “This was widely signposted in advance and is, of course, welcome.

“However, our advice in this area is always the same – any freeze or reduction in fuel duty should not be used as an excuse to avoid proactively managing fuel use and vehicle policy.

“Your fleet policy should be designed to get your drivers behind the wheel of the most economical vehicles possible, and they should drive those vehicles in a manner that is mindful of their fuel consumption.”

Van benefit charge frozen

Killeen said: “The freezing of the van benefit charge for 2013-14, together with a commitment to future rises only in line with inflation, are very much to be welcomed.

“Van taxation is essentially at the correct level and van drivers are therefore unlikely to be hit with large increases in the foreseeable future.

“It may also signal that there aren’t any plans for CO2-based benefit in kind taxation in the foreseeable future.” 

Additional support for employee car ownership schemes

Killeen said: “An interesting aside is that the beneficial loans threshold from £5,000 to £10,000, which is something that could make employee car ownership schemes more attractive. 

“While it is perhaps not a major development, it may rekindle some interest in these schemes among some employers and help to support those schemes that are already in place.”
 



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