AutoPlanet News & Views: Low Emission Vehicles Could Help Businesses Combat Emergency Budget Tax Increases

Businesses that will be hit after the new Government’s emergency Budget revealed a raft of vehicle tax increases, can in fact make savings if they opt for low emission cars that fall outside the hikes.

Neil Harding, Business Specialist at Waters, said, “Cost reduction and carbon emissions cutting go hand-in-hand. For fleet operators wanting to keep operating costs under control and company car drivers who want to keep their benefit-in-kind tax bills in check, low emission vehicles are the optimum choice.” Harding continued, "And with Fiat, Kia, Mazda, Peugeot, Renault and SEAT we're sure to have the right vehicle for most business requirements."

Now on show across Waters AutoPlanet dealerships, this diverse brand and model range offers numerous models that emit less than 160g/km of CO₂ a model-for-model basis. Impressively, there are many models that fall into the cut-price 10 per cent (13% for diesel models) company car benefit-in-kind tax band applicable to sub 120g/km models. In addition, there are also ultra-clean models that also beat the 110g/km threshold for 100 per cent first year capital allowances which applies to the cleanest cars on sale.

Harding also warns of the scheduled rise in VAT next year and expects this will result in local businesses bringing forward car buying decisions to beat the tax increase.

The main tax measures announced by the new Chancellor were:

· Value Added Tax – up to 20% from January 4, 2011.

· National Insurance - employee and employer National Insurance (NI) rates will increase by 1% from April 6.

· Corporation Tax - a reduction in the main rate of corporation tax from 28% to 24% starting on April 1, 2011 and small profits rate cut from 21% to 20%.

· Capital allowances - a reduction in the main rate of capital allowances from 20% to18%, and the special rate from 10% to 8%.

· Fuel duty - a 1p a litre rise in duty on October 1 and a further 0.76p a litre rise on January 1, 2011.

· Company car tax - rates to rise as scheduled in April next year with the starting rate of 15% applying to cars emitting between 121 and 129 g/km.

Harding concluded, “We’re going to see local businesses continuing to adopt ‘greener’ fleet policies with more and more vehicles falling into lower CO₂ categories because that is a sure-fire way to cut costs. Mazda’s range of low emission models is continuing to expand and we expect to win more fleet business as a result in 2010.”

To find out how Waters AutoPlanet can cut the cost of corporate motoring, phone or call in to any of our branches: