The Chancellor’s Autumn Statement was announced on 23rd November 2016. For company car drivers and fleet operators there was good news and some less positive announcements. GWA bring you the key changes.
A rise in road fuel duty was cancelled, but the tax treatment of cars funded via salary sacrifice will change in April 2017, with certain exclusions. More detail on company car tax bands for 2020-21 was also revealed.
Company car tax (CCT) bands 2020-21: The Chancellor announced new, lower tax bands for the lowest emitting cars from April 2020. The appropriate percentages for zero-emission cars will be 2%, while those for cars with CO2 emissions of between 1g/km and 50g/km will vary between 2% and 14% depending on the number of zero-emission miles the vehicle can travel. The appropriate percentages for cars with CO2 emissions of 90g/km and above rises by one percentage point to a maximum value of 37%.
ULEVs exempt from salary sacrifice reforms: Tax and employer National Insurance advantages of salary sacrifice schemes will be removed from April 2017, with exemptions for arrangements relating to Cycle to Work and ultra-low emission cars (ULEVs). This will mean that employees using part of their gross salary to pay for benefits-in-kind such as cars will pay the same tax as those who buy them with post-tax income. Arrangements for cars will be protected until April 2021.
Valuation of benefits-in-kind: The government will consider how benefits-in-kind are valued for tax purposes, publishing a consultation on the valuation of all benefits-in-kind – including company cars – at Budget 2017, looking specifically at how the taxation of benefits-in-kind and expenses could be made fairer and more coherent.
Roads and local transport: The new National Productivity Investment Fund (NPIF) will provide £1.1 billion of additional funding by 2020-21 to relieve congestion and deliver upgrades on local roads and public transport networks. On strategic roads, an extra £220 million will be invested to tackle key pinch-points.
Future transport: The NPIF will invest a further £390 million by 2020-21 to support ultra-low emission vehicles (ULEVs), renewable fuels and connected and autonomous vehicles (CAVs). This includes £80 million for ULEV charging infrastructure, £150 million in support for low emission buses and taxis and £100 million for new UK CAV testing infrastructure.
Cambridge-Milton Keynes-Oxford expressway: The Government has accepted the National Infrastructure Commission’s interim recommendation for a Cambridge-Milton Keynes-Oxford expressway, and will provide £27 million in development funding.
100% first year capital allowance for workplace ULEV charge points: Companies investing in chargepoints for electric vehicles can claim a 100% first-year capital allowance, available to the end of March 2019 and adding to existing company car tax incentives for ULEVs.
Road fuel duty frozen: The planned road fuel duty rise is cancelled, saving motorists a claimed £130 a year and van drivers a claimed £350 a year compared with pre-2010 fuel price ‘escalator’ levels.
Insurance premium tax rise: The standard rate of insurance premium tax (IPT) will rise from 10% to 12% on June 1st 2017, although as IPT is a tax on insurers any impact on premiums depends on insurers’ commercial decisions. The Ministry of Justice is consulting on proposals which will reduce the number of ‘whiplash’ injury claims and allow insurers to cut premiums, equating to expected average savings of around £40 a year for drivers in England and Wales.