As controversial as it was in many respects, the new Chancellor’s ‘mini-budget’ on September 23rd was broadly welcomed by the fleet industry.
Kwasi Kwarteng’s series of measures contained the infamous decision to scrap the 45p rate of income tax for high earners, now since reversed. But there were other announcements that pleased leading figures in the fleet industry, such as the retention of the annual investment allowance and the freezing of Corporation Tax.
The ‘significant tax cuts’ will help support business growth, said David Bushnell, director of consultancy and strategy at Fleet Operations.
“Kwasi Kwarteng’s decision to permanently keep the annual investment allowance at £1 million is notably reassuring for fleets planning to invest in new technology and charging infrastructure,” said Bushnell. “The decision to freeze Corporation Tax at 19% - for the financial year beginning April 1, 2023 – is also welcomed, but the impact of this must now be factored into fleet budget plans and cost projections.”
“Over the coming months, we hope to see further action from government that will help accelerate fleet transport decarbonisation and the road to zero,” he added.
Others viewed it more cautiously, but still felt it was a step in the right direction.
Jon Lawes, managing director of Novuna Vehicle Solutions, said it was a welcome boost but wants to see more. “The discrepancy in VAT on domestic versus public charging threatens to undermine momentum towards EVs. In light of current electricity costs, it was disappointing not to see a VAT reduction introduced.”
“We’re encouraged to see the plans to accelerate a number of key infrastructure projects, including the Local EV Infrastructure Fund and the Rapid Charging Fund,” said David Savage, vice president for UK and Ireland at Geotab. “However, there remains a clear need to encourage and accelerate EV adoption.”