The Autumn 2023 Statement has been announced. Amongst the 110 measures were a number of changes that have been generally welcomed by the fleet and leasing industry. Here are some of the key takeaways…
Making Permanent Tax Breaks for Business Investments: The Chancellor made permanent the policy of full expensing for businesses investing in plant and machinery, which includes trucks and vans. This policy, initially introduced in 2021 and then replaced in 2023, allows businesses to deduct the full cost of qualifying investments from their taxable profits. Notably, cars and vehicles purchased for leasing are excluded from this scheme. The government is consulting stakeholders, including the Finance and Leasing Association (FLA) and the British Vehicle Rental and Leasing Association (BVRLA), to potentially include leasing in the regime.
Support for Electric Vehicles (EVs): The government has allocated £2 billion for zero-emission vehicle manufacturing and is working to remove planning constraints to accelerate the expansion of EV charging infrastructure. This includes reforms to cut grid connection waiting times.
Fuel Duty: There were no changes announced in the Autumn Statement, fuel duty will remain at the same level, though the temporary 5p-per-litre cut is due to run out in March 2024.
National Insurance Contributions (NICs): There was a reduction in employee NICs from 12% to 10%, and for the self-employed from 9% to 8%, effective from January 6th 2024. This change will be reflected in the driver quote to order platform, Origo, for Salary Sacrifice illustrations and the impact will be a small increase in the ‘net cost’ to the employee but the benefit of Salary Sacrifice will remain significant.
Minimum Wage Increase: The minimum wage (NMW) will increase by 9.8% to £11.44 per hour from April and will be extended to 21 and 22-year-olds. Care should be taken by those operating Salary Sacrifice Schemes with employees who are close to the NMW after the sacrifice.
As with almost all budget announcements, we are left with something to think about in terms of changes, improvements and opportunities. So, if you are a current customer who has questions, please don’t hesitate to contact your account manager. If you aren’t a customer but would like to discuss how we can support you with your latest fleet objectives please call 0113 3911791 or email contactvls@jct600.co.uk