Fleet Managers Give UK Budget Mixed Reception

Greg Hyde

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30th October 2018

Two fleet management trade organizations have responded in contrasting ways to UK Chancellor Philip Hammond’s Budget.

The British Vehicle Rental and Leasing Association (BVRLA) praised Hammond for saying he would “review … the impact of WLTP [Worldwide harmonized Light vehicles Test Procedure, a test that purports to determine a vehicle’s fuel consumption and carbon footprint more accurately than previous ones] on Vehicle Excise Duty (VED) and company car tax”.

The organization’s CEO, Gerry Keaney, said he welcomed Hammond’s signals that he would revise tax bands to take account of any undesirable financial effects of the WLTP’s implementation on fleet managers. “It is great to hear that the Treasury is making plans to remedy any potential tax distortion caused by the transition to the new WLTP emissions standard in April 2020,” he said. Keaney also praised Hammond’s decision to postpone plans for vans’ VED to be priced according to their WLTP results.

However, Association of Car Fleet Operators (ACFO) chairman John Pryor hit out at Hammond’s decision not to disclose what the VED rates would be after 2020/21 for company cars whose CO2 emissions were measured under the New European Driving Cycle (NEDC), the test the WLTP supersedes. He also said the budget led his organization to question the UK government’s green credentials more generally.

Pryor wrote: “Recently the government cut the Plug-in Car Grant (PiCG) and in the budget it has failed to answer our call for a U-turn on the decision to increase to 16% benefit-in-kind tax on cars with emissions of 50g/km or below in 2019/20 and bring forward the already announced reduced rates, including the 2% threshold for 100% electric models and those with an electric mileage range of up to 130 miles, to April next year from 2020/21. Those twin decisions will, ACFO believe, only serve to dampen fleets’ enthusiasm for ultra-low and zero emission cars”.

The Treasury did not respond to requests for comment on Pryor’s criticisms of Hammond’s budget.

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