S h a r e
A Budget that brings EV certainty to fleets
Recent history has suggested fleets should run for their tin hats whenever the Chancellor gets up to announce a Budget.
But not this, Rishi Sunak’s first as Chancellor.
I was impressed all round by the positive response and support to business in the face of the coronavirus outbreak with all of its unknown outcomes.
Whether that’s 100% discount from business rates for SME retail businesses or the 14-day Statutory Six Pay Statutory Sick Pay (SSP) for those who have to self-isolate and the ability of SME employers to reclaim that two week SSP. Which went hand in hand with the Bank of England’s move on interest rates.
It provides a supportive business backdrop to an uncertain short-term future. But what also impressed me was the long-term vision for fleets and their decision making.
Certainty. Certainty, that tangible thing, that knowingness on how to plan for the future – it was there from Mr Sunak.
We had, finally, certainty that the company car tax rates announced back in summer would actually get the go-ahead from April 06. But there was extra certainty beyond the initial 2020 to 2023 year range; company car tax is frozen from the 2022-23 rates until 2024-25 tax years.
Essentially most rates drop by two percentage points if a car is registered from April 06, 2020 before increasing by one percentage point in each of the following tax years.
And this is what is so encouraging for fleets. Now really is the time to switch to ultra low emission vehicles.
It’s a move that all senior executives within Fleet Alliance have either completed, or are in the process of changing once fleet renewal comes around, and the majority of those cars are zero-emission.
Change your fleet to an electric vehicle and your driver pays no tax in year one; 1% in year two; 2% in years three and four.
That is a tremendous incentive for the company car.
I agree there are challenges to this; one is the cost of rentals. These will rise slightly thanks to the reduction in the value of the Plug-in Car Grant from £3,500 to £3,000, also announced by the Chancellor.
But with some intelligent fleet thinking that balances driver benefit and fleet cost, company car policy can successfully accommodate this. And should. It’s something we practice here at Fleet Alliance.
Providing even greater encouragement for fleets to think green with car fleet policy was the Chancellor’s announcement of £500m over five years for the roll-out of fast chargers. EV drivers should never be further than 30 miles from a charge point is the government’s aim. This fund also includes a Rapid Charging Fund to assist businesses to connect fast chargers to the grid so EVs can be charged at work.
There are still reasons for fleets to drag their heels over decarbonising their fleet, of course. These include the freezing of fuel duty by the Chancellor coinciding with the Saudi/Russia oil price battle which is seeing the cost of fuel court prices plummet as crude costs lower.
But that would be misguided; retrograde.
Fleets, do not be tempted: plan and make the move to ultra low emission vehicles. And do it now.
We are here to help you every step of the way. We’ve done it ourselves.
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