Autumn Budget 2017 – What it means for fleets

There is strong Electric vehicle support in the recent Autumn budget, with Diesel being targeted.

Company Car & Van Tax

There will be an increase in company car tax on diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard. This will be an increase from the current 3% supplement to 4% and will come into effect from 6th April 2018 and will only affect cars, not commercial vehicles. Under the RDE2 test a new diesel or petrol car must emit no more than 0.080g/km of nitrogen oxide (NOx), currently, no diesel car meets this requirement.

The current Fuel Benefit Charge and Van Benefit Charge will both increase with the RPI (Retail Price Index) rate from the 6th April 2018. Company Car Tax rates have been published up until April 2021, rates beyond 2021 will be published in Budget 2018.

Vehicle Excise Duty

VED (Vehicle Excise Duty) rates will rise in line with RPI (Retail Prices Index) from the 1st April 2018. This will affect the rates of vans, cars and motorcycles registered before April 2017 and the first-year rate for cars registered after April 2017.

There will be a VED supplement on new diesel cars first registered from 1st April 2018. This will mean that their first-year rate will be as if they were in the VED band above. However, this will not apply to those diesel cars which meet Real Driving Emissions Step 2 (RDE2) standards.

From April 2019, zero-emission capable taxis will be made exempt from the VED supplement on expensive cars.

Fuel Duty

The planned April 2018 rise for fuel duty has been cancelled and both petrol and diesel duty will continue to be frozen. The Government will review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate ahead of decisions at Budget 2018. The fuel duty escalator for Liquefied Petroleum Gas (LPG) will end. The LPG rate will be frozen in 2018-19 alongside the main rate of fuel duty.

Air Quality

To help combat the level of pollution by diesel cars the government has allocated £220 million for a new Clean Air Fund to support the National Air Quality Plan published in July.  Local authorities will be able to use this money to help people adapt as steps are taken to reduce air pollution. Possible ways the money could be spent include reducing the cost of public transport for those on low incomes or modernising buses with more energy efficient technology. The money will come from a temporary rise in Company Car Tax and Vehicle Excise Duty on new diesel cars.

Ultra-Low Emission Vehicles

The Government has identified the need to develop the existing electric charging network. There are currently 115,000 electric cars in the UK and 13,000 charging points spread across 4,500 locations. A £400m fund has been set up with £200m being contributed by the government and £200 from the private sector, with a further £40m allocated for research and development into charging technology.  A commitment has been announced to ensure that at least 25% of Central Government department fleets will be electric vehicles by 2022.

The current Plug-In Car Grant will also continue until 2020, with a further £100 million provided by HM Treasury.

Connected and Autonomous Vehicles

The Driverless Car industry in the UK is estimated to be worth £28 billion to the economy employing over 27,000 people. The government has announced changes to the regulatory framework such as setting out how driverless cars can be tested without a human safety operator to ensure fully self-driving vehicles are on UK roads by 2021. The National Infrastructure Commission (NIC) will also launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars.

Chancellor Philip Hammond told the BBC the objective was to have “fully driverless cars” without a safety attendant on board in use by 2021.

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