Industry responds to the Budget
As George Osborne delivers his sixth Budget as chancellor, bodyshop has rounded-up some of the latest industry responses.
Key announcements from the Budget include:
– £100m funding for autonomous vehicles to ensure Britain ‘stays ahead in the race to driverless technology’.
– The planned fuel duty rise scheduled for September had been cancelled – it has now been extended into the autumn.
– The national minimum wage is to rise by 20p an hour to £6.70 from October 2015
– Personal tax-free allowance will increase from £10,600 to £10,800 in 2016 and to £11,000 in 2017.
– Corporation tax will be cut by 20% from April
– National insurance has been abolished for companies employing under 21s.
– From April 1, 2015 Vehicle Excise Duty (VED) rates for cars, vans, motorcycles and motorcycle trade licences will increase by the rate of inflation.
– Company car benefit-in-kind tax rates will increase by three percentage points in 2019-20, the Budget papers reveal.
– The Chancellor has announced that the fuel benefit charge multiplier for company cars will increase from £21,700 in 2014/15 to £22,100 in 2015/16. From April 6, 2016 the multiplier will once again increase by RPI.
– The van benefit-in-kind tax charge will increase from £3,090 in 2014/15 to £3,150 in 2015/16, the Chancellor has announced. From April 6, 2016 the charge will once again increase by RPI
– From April 6, 2015 the van fuel benefit charge multiplier will increase from £581 to £594, according to the Budget papers published following the Chancellor’s statement. From April 6, 2016 the multiplier will once again increase by RPI.
– The government will, once the Severn River Crossings are in public ownership post-2018, abolish VAT and reduce tolls by the equivalent amount and, abolish Category 2 (small goods vehicles and small buses) and include those vehicles in Category 1 (motor cars and motor caravans), therefore reducing the toll paid by small goods vehicles and small buses.
Rupert Pontin, head of valuations, Glass’s
This seems to be a structured, sustainable and fiscally neutral budget albeit with some significant gimmicks around savings and personal taxation.
There is interesting and welcome support for the UK automotive industry in the shape of £100 million contribution for the development of autonomous vehicles to keep us ahead in this area of development for this market. This has the potential to be a crucial area in the future.
In the shorter term, freezing fuel duty is also helpful while additional support and incentives for green and hybrid technology from a business taxation perspective is also interesting given the carbon emissions to which the UK is committed.
James Tew, CEO, iVendi
This Budget was always going to be something of a non-event in motor industry terms simply because of the nature of the Coalition and the fact that the public finances are so tight. Perhaps, however, no news is good news. What all new and used car businesses want in the post-recessionary economy is a steady period following several years of turbulence. We should all be hoping that the outcome of the general election provides a similar level of stability that will give the economy the best chance of continuing to recover during the next few years.
Ian Simpson, sales and marketing director, The Warranty Group
As expected, there is little in here that will impact on the motor industry in any fashion in the short term. The changes in personal tax allowances are a small giveaway but probably not be enough to sway anyone considering changing their car while the holding of fuel duty is welcome but again will have a limited effect. Really, this Budget is just a sideshow on the way to the general election and the best thing that can happen there is a decisive result. A hung Parliament or one that is run by a less-than-cohesive coalition would probably erode the consumer confidence that we have seen building over the last couple of years and have a more discernible effect on the new and used car markets.
Jason Cross, managing director, FAB Recycling
I welcome this last budget by the Chancellor, especially the proposed cutting of corporation tax to 20%, which can only be good news for companies such as FAB Recycling.
I also heartily welcome the planned abolition of national insurance for firms that employee people under 21.
FAB Recycling has a proud record of recruiting young people, but there are additional costs when taking on employees straight from school in terms of supervision and training, so anything that can help with that would be a great support for us. I’m also pleased the Chancellor is going to look at business rates. The nature of our business means we need lots of physical space and business rates are far too high, and returns far too low, in my opinion.
I would have liked more information on proposals to get more funds to companies that need it, especially about how the Government plans to cut down the amount of red tape during the process.
While I welcome the plan for greener energy generation and greater transport infrastructure here in the South West, huge numbers of us still rely on our cars as our main mode of transport, and I would have liked the Government to incentivise motorists and fleets to use more recycled non-safety vehicle parts, to enable them to keep their cars on the road for longer.
I would also have liked to see more detail about which high-growth industries will receive additional support because how long that support lasts is absolutely crucial for a business such as ours. I believe the dismantling industry has great potential to become an even larger player in the UK’s economy, if only it can get the right support, at the right time, in the business cycle.
James Hookham, managing director of policy and communications, FTA
FTA members will be pleased and impressed that two issues raised at our Driver Crisis Summit have been so swiftly addressed. Speeding up driving test bookings for truck drivers and medical assessments will help us get qualified drivers on the road quicker and more reliably helping industry address its shortfall of 60,000 drivers. We look forward to seeing this implemented as soon as possible.
Mike Hawes, chief executive, SMMT
The £100 million injection into connected car research, development and testing – to be matched by industry – will provide a vital boost to the UK automotive industry and put us ahead in the global race to build the cars of the future. It is tremendous news that government has adopted SMMT and industry’s call for this investment – it lays the foundations for the UK to become a centre of excellence in intelligent mobility, and underlines the importance of automotive engineering to the UK economy.
In addition, we’re pleased that government has recognised the importance of China, which is now the automotive industry’s biggest export market. Sales of British-built cars there have grown seven-fold in the past five years. This funding will help us to further capitalise on this opportunity, and strengthen the significant work SMMT is doing to grow the UK automotive presence in China.