Lights from traffic outside Big Ben in London

Budget 2016: what it means for fleets


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The government Budget was revealed on Wednesday (16 March), during which Chancellor George Osborne made several announcements set to impact the fleet industry.

Businesses will benefit from the government's plans to cancel the inflationary rise of fuel duty next month, meaning the rate will stay at 57.95 pence per litre for 2016-17.

"In the last 12 months, petrol prices have plummeted. That is why we pencilled in an inflation rise. But I know that fuel costs still make up a significant part of household budgets and weigh heavily on small firms," Osborne said.
Freezing fuel duty will result in a £75 a year saving for the average motorist, and a £270 a year saving for a small firm with a van.
The chancellor also announced the government will be proactive in supporting transition to cleaner, zero and ultra-low emission vehicles (ULEVs). The 100% first year allowance (FYA) for companies purchasing low emission cars will be extended by a further three years to April 2021.

Yet, to reflect the drop in car emissions, the government will be reducing the main rate threshold for capital allowances for business cars from 130g/km to 110g/km of CO2 and the FYA threshold from 75g/km to 50g/km of CO2 from April 2018.

Osborne reaffirmed that the government will continue basing company car tax on CO2 emissions and will consult on restructuring the lower CO2 bands for ULEVs to refocus incentives on the cleanest vehicles beyond 2020-21.

Among the other announcements is the move to cut corporation tax from 20% now to 17% by 2020.

Elsewhere, Osborne reiterated the government's commitment to the development of driverless cars. Planned actions include conducting trials on the strategic road network by 2017, along with a consultation on the establishment of a £15m 'connected corridor' stretching from London to Dover to allow cars to communicate wirelessly with infrastructure and potentially other vehicles.

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