There were a number of announcements impacting on the motor industry and company car and van sector, contained in last week’s Budget Statement of Chancellor of the Exchequer Philip Hammond.
In support of the National Air Quality Plan published in July, the government will provide £220 million for a new Clean Air Fund. It will allow local authorities in England with the most challenging pollution problems to help individuals and businesses adapt as measures to improve air quality are implemented. The Fund will be paid for by:
- A Vehicle Excise Duty (VED) supplement that will apply to new diesel cars first registered from April 1, 2018, so that their First Year Rate will be calculated as if they were in the VED band above. It will not apply to next-generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards.
- A rise in the existing company car tax diesel supplement from 3% to 4%, with effect from April 6, 2018. It will also apply only to diesel cars which do not meet the Real Driving Emissions Step 2 (RDE2) standards.
Company car tax and Vehicle Excise Duty (VED)
The government will legislate in Finance Bill 2017/18 to confirm that carbon dioxide figures compatible with the current New European Driving Cycle test procedure will be used by HM Revenue and Customs for the purposes of collecting company car tax until April 2020. The government will however also take forward legislation in a future Finance Bill that will change the system for measuring carbon dioxide emissions to the Worldwide Harmonised Light Vehicle Test Procedure from April 2020. Similar legislation will be introduced in respect of VED.
The scheduled rise in fuel duty from April 2018 has been cancelled. It is the eighth consecutive year that there has been no increase.
Vehicle Excise Duty (VED)
From April 1, 2018, VED rates for cars, vans and motorcycles registered before April 2017 and the First-Year Rates for cars registered after April 2017 will increase in line with RPI.
Benefits in kind: electric vehicles
From April 2018, there will be no benefit-in-kind charge on electricity that employers provide to charge employees’ electric vehicles.
Ultra-low emission vehicles
To support the transition to zero emission vehicles, the government will:
- Regulate to support the wider roll-out of charging infrastructure
- Invest £200 million, to be matched by private investment into a new £400 million Charging Investment Infrastructure Fund
- Commit to electrify 25% of cars in central government department fleets by 2022
- Provide £100 million to guarantee continuation of the Plug-In Car Grant to 2020 to help with the cost of purchasing a new battery electric vehicle.
Connected and Autonomous Vehicles (CAVs)
The government wants to see fully self-driving cars, without a human operator, on UK roads by 2021. The government will therefore make world-leading changes to the regulatory framework, such as setting out how driverless cars can be tested without a human safety operator. The National Infrastructure Commission (NIC) will also launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars.
The government is investing an additional £45 million in 2017/18 to tackle around 900,000 potholes across England.