Last month’s Budget included several items of interest for the fleet sector.
The Chancellor announced that vehicle leasing companies will soon benefit from a roll out of ‘full expensing’, which will apply to leased assets such as cars and vans. Fuel duty will also be frozen.
Full expensing was a tax break initially given to businesses last autumn that invested in plant and machinery, including trucks and vans. Companies would receive a discount of 25p for every £1 they spent, but cars were exempt from the scheme, as were vehicles that were bought with the intention of being leased.
The full expensing scheme has now been extended to companies that lease vans and trucks, although it is not yet clear if cars will be included. The Treasury has also declined to put an exact timeframe on the implementation of the scheme.
The British Vehicle Rental and Leasing Association (BVRLA) estimates that the landmark shift in Government tax policy is poised to unlock up to £1bn worth of additional investment in commercial vehicles.
“It’s excellent that the Government recognises that leasing is the funding route of choice for many businesses and makes a vital contribution to investment,” said Stephen Haddrill, director general of the Finance and Leasing Association (FLA). "We welcome this transformative move. Its affordability will be covered through increased investment and higher productivity, and its introduction should be as fast as possible."
BVRLA chief executive Gerry Keaney said that it was a "monumental step forward to rectify an historic injustice. The BVRLA has been an active voice in achieving this change and welcomes the opportunity to engage further in delivering this long overdue alignment in tax policy.”
The fleet sector also welcomed the freezing of fuel duty by the Chancellor at 52.95p per litre and the announcement of the new benefit-in-kind tax rates up to April 2028. But there was disappointment at the lack of incentives for EV adoption.
