DIRECTIONS Budget 2013 Report

Transcription

1 DIRECTIONS Budget 2013 Report arval.co.uk

2 Introduction This bulletin brings you all the important and relevant highlights from the 2013 Budget in an easily digested document. It includes the latest tables for Benefit in Kind and Vehicle Excise Duty as well as an explanation of all the tax changes that are likely to impact your company vehicles. Overview Budget 2013 allows fleets to plan ahead Fleets had plenty to contemplate in the Chancellor s latest Budget in which he claimed the tax cuts aren t borrowed; they are paid for. Headlining for fleets were two new low-co2 company car tax bands which will come into play in April 2015, plus the removal of the planned increase in fuel duty which was scheduled for September this year. The changes to capital allowances revealed last year were confirmed, despite industry lobbying. Alongside this a new 75g/km first year allowance level was announced for introduction in April On the list of fleet cost increases were Vehicle Excise Duty (VED) and the fuel benefit charge. However, there was some hope for the UK s transport infrastructure with a promise of an additional 3 billion per year from 2015, some of which would be spent on roads. Alongside this, small businesses look set to benefit most from a discount on employers National Insurance Contributions (NIC) which removes the first 2,000 of any NIC payment. The Employment Allowance comes into play from April next year. Company car tax New tax bands for low CO2 cars From April 2015 the Government will introduce two new low-co2 tax bands to the company car tax system. The bands will cover cars with CO2 emissions of 0-50g/km and 51-75g/km and have a tax banding of 5% and 9% respectively. These tax bands will then rise to 7% and 11% from April In support of low emission vehicles the Chancellor announced that; The Government will review these incentives for ULEVs (Ultra Low Emission Vehicles) in light of market developments at Budget 2016, to inform decisions on company car tax from onward. While the Budget document did not reveal the full rates for what would happen in the tax year or beyond, it did state: In there will be a three percentage point differential between the 0-50 and g/km CO2 bands, and between the and g/km CO2 bands. In and there will be a two percentage point differential between the 0-50 and g/km CO2 bands and between the and g/km CO2 bands. The Chancellor reaffirmed his commitment to revealing changes to the company car tax rates three years in advance. 2/6

3 Company car benefit-in-kind bandings: BLK % banding 2012/13 (g/km) 2013/14 (g/km) 2014/15 (g/km) 2015/16 (g/km) 2016/17 (g/km) n/a n/a n/a 7 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Round emissions down to the nearest figure. For diesel models add 3%, up to a maximum 35% banding until the end of tax year. Pure electric cars rated at 0% BIK until April /6

4 Van benefit charge Company van charge frozen The benefit charge for personal use of a company van has been held at 3,000 for the tax year, according to the 2013 Budget document. The Budget also revealed the charge would increase in line with RPI from 6 April The Government also committed to announcing the van benefit charge one year in advance. Capital allowance The Government plans to extend the first-year 100% capital allowance band beyond April 2015 to the 2017/18 tax year. Previously announced plans to reduce the threshold to 95g/km from the 2013/14 tax year will go ahead, with a new lower threshold of 75g/km announced and planned to be introduced from tax year 2015/16. Fuel duty Fuel tax rise scrapped In a bid to support businesses and drivers the Chancellor cancelled the 1.89 pence per litre (ppl) fuel duty increase that was planned for September this year. The scrapped rise means that fuel duty will have been frozen for nearly three and half years, the longest duty freeze for over 20 years, according to the Budget document. The Chancellor pointed out: In total, the Government s actions on fuel duty will have eased the burden on motorists by 21.5 billion over the Parliament to From April 2013, pump prices will be 13ppl lower than under the previous Government s plans, and are forecast to be 18ppl lower by the end of the Parliament. This means it will cost the typical motorist 7 less to fill up their tank every time they visit the pump from April, and 10 less by the end of the Parliament. Fuel benefit charges Free-fuel benefit charge to rise The Chancellor signaled his intent to further increase the fuel benefit charge the levy imposed for businesses offering free fuel from 6 April While the exact increase was not announced in the 2013 Budget, George Osborne said the increase will be based on the September 2013 Retail Price Index (RPI) figure. The changes will be brought in by secondary legislation in the autumn, in time for the normal tax code exercise in January The free fuel benefit charge for cars is currently 20,200 and will rise to 21,100 in The charge will also rise by the same level in for vans, where the current charge is 550 and the charge is /6

5 Vehicle Excise Duty Car tax rises with Retail Price Index Vehicle excise duty will go up in line with the Retail Price Index from 1 April Those vehicles with CO2 emissions of up to 120g/km (Band C) will escape the rises, but bands D-M see rises of between 5 and 35. The Government added that it has no plans to make significant reforms to the structure of VED for cars and vans in this Parliament. VED Band C02 (g/km) 2013/14 standard 2013/14 first year A Up to B C D E F G H I J K L M Over ,065 VED bands and rates for vans registered on or after 1 March 2001 Vehicle registration date Tax year 2012/13 Tax year 2013/14 Early Euro 4 and Euro 5 compliant vans All other vans /6

6 Roads Extra 3bn promised to improve UK infrastructure UK roads will get a slice of an extra 3 billion spend on infrastructure projects from April 2015, according to the Chancellor, George Osborne. The money for the infrastructure projects will come from savings made by government departments, according to the Chancellor. He added: We re already spending more on new roads than in a generation. The Government will set out how this capital spending will be allocated at the Spending Round. The Spending Round will take a long term approach to capital planning, including setting planning assumptions out to for key areas of capital expenditure. To get in touch with us please contact your Arval Business Manager or: Call: info@arval.co.uk Web: Further information Budget documents: Arval Centre, Windmill Hill, Swindon SN5 6PE United Kingdom WH /13 arval.co.uk 6/6