Press Releases
April 24th, 2009
The Lex View - Budget 2009 – Alistair Darling Delivers Few Surprises
The UK’s largest vehicle leasing company, Lex today delivered its verdict on Chancellor Alistair Darling’s 2009 Budget report and its implications on company car owners, drivers and leasing companies.
Commenting on the overall impact of the Budget, Nigel Stead, Managing Director of Lex comments: “The Chancellor provided very few surprises as most measures were widely predicted and the drive to reduce CO2 emissions continues. However, we are disappointed with the increase in fuel duty which will have a big impact on the fleet, the transport sectors and private motorists.”
Overall the 2009 Budget was fairly uneventful for the fleet and leasing industry, with many of the announcements repeating previous announcements, or very light on detail. That said, there have been a number of minor amendments to company car tax and an increasing focus on the environment.
The headline grabbing elements for the motor industry surround the vehicle scrappage scheme, which is light on detail, and may not provide the boost the industry needs, where it only relates to 10 year old cars being exchanged for new cars. The Government intends to provide a £1,000 scrappage payment to the new car purchaser however the participating vehicle manufacturer will need to provide the other £1,000.
In addition there are plans to provide a £2,000 to £5,000 incentive to purchase electric and plug-in hybrid cars, due in 2011. However, there will be a period of discussions with key stakeholders and the industry before the details of the scheme will be confirmed. It is unclear whether this will only apply to privately purchased cars. As yet it is difficult to quantify the benefit based on vehicle availability and the detail; for example Quadra-cycles are excluded.
The big blow to the fleet, transport sectors and private motorists is the confirmation of another increase in fuel duty of 2ppl in September 2009 followed by regular increases of 1ppl above inflation every April until 2013; which will continue transport and travel budgets.
The majority of the remainder of the changes are a “tidying up” of the company car tax scheme, with alternatively fuelled vehicle discounts and the £80,000 cap both being removed in 2011, as well as the announcement of future changes to the company car tax scales.
Consideration is also being given to removing qualifying low emissions cars (“QUALECs”) in the future and replacing this with a company car tax scale staring at 10% as opposed to 15%, and the potential for removal of the of the 3% diesel supplement for Euro VI compliant diesel cars.
Finally some changes to legislation surrounding leasing have also been announced, but we await further details of these changes before we can really comment of the effect this could have on the industry.
Note to editors
About Lex
Lex is part of the Lloyds Banking Group. The business owns a fleet of over 250,000 cars and vans.
Lex has a motoring heritage dating back to 1928. Today over 20,000 businesses across the UK, including two thirds of FT-SE 100 companies, trust it to provide motoring and vehicle services.
The company is the UK's largest contract hire provider of company cars and vans.
For more information, please contact James Lambert, Head of PR at Lex on (+44) 7826 875371 or email james.lambert@lex.co.uk.
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