What does the Autumn Budget mean for your motor trade business?
Chancellor of the Exchequer Philip Hammond delivered the Autumn Budget 2017 on 22 November 2017. Often it can be difficult to sift through the jargon to find out exactly what the Autumn Budget means for you.
Here are several ways the Autumn Budget may affect motor traders:
- First-year vehicle excise duty rate for brand-new diesel cars that don’t meet the latest emissions standards will go up by one band, which could cost drivers between £10 and £500. After that, drivers will be charged a flat rate of £140.
- The diesel supplement for company car tax will rise to 4 per cent.
- Electric vehicles will receive £400 million for charging infrastructure, £100 million for plug-in grants, and £40 million for research and development into charging solutions.
Is government policy affecting the motor trade industry?
The latest budget announcements seem to confirm that the government policy of targeting diesel cars with higher taxes may have put off those considering purchasing a diesel car from doing so. Yet there is emerging evidence - in the form of increased CO2 emissions and the first drop in new car sales in 6 years during 2017 - that such policy may actually be backfiring.
Motor traders generally will have seen the value of used diesel cars plummet in recent months as a perfect storm of 'toxin taxes', increased parking charges and tax rises have led to what petrolprices.com call the 'demonisation of diesel'.
Yet many in the industry are now arguing that cleaner, modern diesels are important in helping the government meet both CO2 and NOx targets in future. However, it seems that many purchasers are shunning them in favour of potentially higher polluting petrol vehicles, and keeping older cars rather than purchasing new ones.
These factors may have had an affect on recent sales, though it should also be stressed that even though official figures indicate that sales have declined, the industry is still relatively buoyant, with the latest figures coming on the back of record sales.
It remains to be seen whether government policy might change again with time, so it's worth keeping an eye on the latest developments. Regardless, Bollington will be here to support you with insurance and risk management to meet the needs of motor traders, whatever vehicles you may be buying, selling, servicing or repairing in the months and years to come.