Mini Budget 2022
‘After the Chancellor’s Mini-Budget, fleets are still waiting for action’ – LeasePlan
Responding to the Chancellor’s Mini-Budget, Matthew Walters, Head of Consultancy Services and Customer Value at LeasePlan UK, said:
On the economic situation:
“This was called a Mini-Budget, but, in truth, its contents were pretty big. With a 1p cut to Income Tax next year and the abolition of the additional rate altogether, the new Prime Minister and her Chancellor have made a clear statement about how they intend to govern the economy.
“But the challenges facing the economy are big, too. The ongoing effects of Brexit, the pandemic, and now a cost of living crisis, mean that the UK faces a number of years of uncertainty and sluggish growth. Even without the Office for Budget Responsibility’s usual economic forecasts, we know that the situation is extremely worrying for many businesses and individuals
“We also know that the fleet industry is well placed to overcome these challenges, just as we have overcome similar challenges in the past. Not only did we account for half of all new car sales in 2021, but we are also leading the adoption of the cleaner motoring technologies that will define the future.”
On the Health & Social Care Levy:
“As expected, the Chancellor has decided to scrap the Health & Social Care Levy that was adding 1.25 percentage points to National Insurance Contributions (NICs) in the current financial year. That 1.25 ppt levy will disappear in November.
“This is a money-saving measure for both employers and employees – although also, specifically, for fleet professionals. Because of the way the tax is calculated for cash allowances and company cars, with NICs forming part of the equation, fleets and their motorists stand to save, too.
“However, it ought to be noted that the Health & Social Care Levy was due to be removed from NICs in April, anyway – so this is only a temporary boon for fleets.
On Fuel Duty:
“We were surprised that the Chancellor didn’t choose to act on Fuel Duty today. While it’s true that petrol and diesel prices are lower than they were in the summer, they are still historically high overall – so motorists would have appreciated the extra relief of a Fuel Duty cut.
“Then there is the unanswered question of what happens to Fuel Duty in the longer term. We have heard a lot of hints and speculation in recent years about a new tax regime to replace Fuel Duty, such as Road Pricing, as the revenues from petrol and diesel vehicles decline. Yet nothing substantive has been done to help solve this multi-£billion problem.
“If we are all to prepare properly for an electric future, it’s vital that the Government doesn’t bury its head in the sand. Truss and Kwarteng need to engage with businesses, fleets and motorists about Fuel Duty’s future – and soon.”
On Company Car Tax rates:
“This was a Mini-Budget, so we didn’t expect it to contain all the detail that we – and fleets – want to see. But we do expect to see some of that detail in the next proper Budget.
“Top of our wish list are the new rates of Company Car Tax for 2025-26 and beyond. The previous Chancellor, Rishi Sunak, began his time in the Treasury by giving us ample warning of upcoming rates, but the numbers that he provided are now starting to age. Fleets and motorists entering into new contracts today are unlikely to know how much they’ll be paying in CCT at the end.
“As much as tax cuts, the fleet industry thrives on tax transparency. Prime Minister Truss and Chancellor Kwarteng have to let us see as far into the future as possible.”
On other delayed legislation
“Again, this was a Mini-Budget, so we didn’t expect too much from it. But, even so, some of the long waits for legislation are now, frankly, getting silly.
“Where is the necessary detail on the ZEV Mandate for manufacturers, requiring them to sell a certain proportion of zero-emission vehicles, that was first proposed and consulted on in summer last year? Where is the new system of VED for vans that was first mooted in 2018? Where is HMRC’s work on how we can, to quote Rishi Sunak in 2020, ‘use VED to further encourage the uptake of zero and ultra-low emission cars’?
“We could go on. Even outside of the Treasury’s red books, we’re still waiting for the new public charging rules – so well designed by various government departments, and so desperately needed – to be actually introduced.
“Prime Minister Truss says that she is all about delivery. If that is true, then she needs to deliver on this lengthening backlog.”