Autumn Statement 2016: How it Affects Drivers

JonathanNovember 24, 2016

Autumn Statement 2016: How it Affects Drivers

Salary Sacrifice

Present salary sacrifice and employee benefit schemes will be liable to income tax and National Insurance Contributions from the 5th April 2017, although exemptions have been made for ultra-low emission vehicles. Contracts initiated before April 2017 will be protected until April 2021.

Company Car Tax

There will be a series of changes to company car tax bandings, which will come into force from April 2020. Full details haven’t been published yet, but the BVRLA have been informed that these are to be addressed in the Treasury’s Finance Bill. The system is set to be more finely granulated, with 15 new bandings – 11 of which for ULEVs. All bar those for vehicles emitting under 50g/km of CO2 will increase in 5g intervals.

These will be as follows:

Emissions Mileage Capability CCT Rate
0 N/A 2%
1-50g/km Up to 130 miles in zero emission mode 2%
1-50g/km 70-129 miles 5%
1-50g/km 40-69 miles 8%
1-50g/km 30-39 miles 12%
1-50g/km Under 30 miles 14%

CCT percentages will then increase by a single percentage rates according to 5g/km intervals – vehicles with emissions of 51-54g/km are 15%; 55-59 will be 16% etc., up to vehicles with emissions of 160g/km and above, which will be liable to 37%. The mileage capability will be recorded by the DVLA in the vehicle registration document.

Electric Vehicles & Hybrids

An additional £40 million will be provided to fund the plug-in car grant, however no additional funding will be provided for plug-in vans.

Businesses who wish to install an electric charge point for electric vehicles will be able to claim 100% enhanced first-year capital allowances for this expenditure. This allowance will expire on 31st March 2019 for Corporation Tax purposes and 5th April 2019 for Income Tax.

Investments

Fuel duty has been frozen at 57.95p per litre.

£1.1 billion will be allocated to local transport networks in England, with a further £220 million to address local traffic choke points. This will come as part of a new £1.3 billion package of road investment.

£390 million will be invested in low-emission vehicles, leaving more money for more EV charging points and “building our competitive advantage in low-emission vehicles and development of connected autonomous vehicles”.

The government are set to increase their investment in science and technology innovation, which will likely have a positive impact on the automotive and engineering industry.

“We welcome the investment to enhance the charging network for electric vehicles, as well as further support to boost uptake of low emission buses and taxis. These markets are still developing and it’s critical the government continues to encourage this through consistent policies and investment. Furthermore, the commitment to connected and autonomous vehicle testing infrastructure is an area in which the UK is already one of Europe’s leading centres.”

“This commitment will help cement that position and promote this next generation technology, which has the potential to transform lives – preventing more than 25,000 accidents and creating 320,000 new jobs.”

“We are, however, disappointed that the government has not done more on business rate reform. SMMT called for the removal of plant and machinery from business rates valuation, which would have helped encourage further investment at this time of great uncertainty.” – SMMT statment, via Autocar

Insurance

Insurance premium tax will rise from 10% to 12%, where as whiplash claim action will save drivers an average of £40 on their annual insurance premiums. The RAC are doubtful that any saving will be felt by motorists.

Sources

BVRLA
Autocar


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