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March 2017 Budget highlights

The Chancellor of the Exchequer has delivered his summer Budget, the final before the Budget reverts to Autumn.

The key announcements of interest to BVRLA members are as follows:

Corporation Tax As announced at Autumn Statement, Corporation Tax rate will be cut to 19% from April 2017, and again to 17% in 2020. There will also be a change in the way this is recorded, to an accruals-based approach, in line with the ONS’s updated methodology.

Vehicle Excise Duty As previously announced at Budget 2016, VED rates for cars, vans and motorcycles registered before April 2017 will increase by Retail Prices Index (RPI) from 1 April 2017. VED rates for hauliers and HGV Road User levy are both frozen for a further financial year (from 1 April 2017). A call for evidence will be launched over the summer on plans to update the current HGV Road User Levy, with a greater incentivisation of efficient routes and better air quality vehicles.

Company Car Tax Company Car Tax rates also go unchanged.

Fuel Duty Fuel Duty will remain frozen for a further financial year, from 1 April 2017 throughout 2017-18. Fuel duty has not risen since March 2011.

Air Quality The Government will publish a new Air Quality outlook and plan in the next two weeks, which will be put out to consultation over the summer ahead of making any tax changes at the Autumn Budget 2017. In particular, the Treasury has indicated concerns about certain types of diesel vehicles in certain areas of the country, so a multi-pronged approach may be considered.

Benefits in Kind The Government is considering how the tax system could be made fairer and more coherent, with a further consultation planned over summer 2017 to consider the taxation of benefits in kind and employee expenses. This will look at exemptions and the valuation methodology for the income tax and employer NICs treatment of benefits in kind, in order to better understand whether their use in the tax system can be made fairer and more consistent.

Roads The Government will invest £90 million for the upkeep and upgrading of roads in the North, and £20 million for those in the Midlands, from the Strategic Roads Network fund. There will also be a new £690 million competition for Local Authorities to tackle local congestion. Further details will be announced by Transport Secretary, Chris Grayling, in due course.

New technologies The Government will also provide additional investment of £270m funding toward new disruptive technologies including biotech, robotic systems and driverless vehicles.

Lease Accounting The Government will carry out a consultation on the legislative changes required following the announcement of the International Accounting Board’s new leasing standard – IFRS16, which comes into effect on 1 January 2019 – over summer 2017. At present, the Government intends to maintain the current system of lease taxation by making legislative changes which enable the rules to continue to work as intended. 

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