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Businesses with a fleet of company cars will be wondering what changes in the Budget affect them and their fleet, so we dug a little deeper to find the details
Businesses with a fleet of company cars will be wondering what changes in the Budget affect them and their fleet. There were several announcements, most of which were not actually announced but hidden in the documentation.
Firstly, Rachel Reeves announced that the Fuel Duty increase would be frozen and the 5p temporary rate reduction would be maintained, so there was some good news.
She went on mention that vehicle tax would have an increased differential in rates between electric vehicles and fossil fuelled traditional vehicles.
Zero emission vehicles will see the introduction of Vehicle Excise Duty from April 2025, for cars, vans, motorcycles and motorcycle trade licences with zero emissions. For now, standard cars are subject to inflation increases from April 2025.
There are also changes to Vehicle Excise Duty first year rates, paid in the first year of a car’s lifecycle. From April 2025 these rates are changed to widen the difference between zero emission, hybrid and internal combustion engine cars.
Zero emission cars will of course pay the lowest rates, rates for cars with CO2 emission from 1 to 50g per km and for 51 to 75g per km will significantly increase to bring them closer to higher emitting cars. Cars in the bands for CO2 of 76 to 90g per km and above will pay double the equivalent rates in 2024 from 2025.
Also from April 2025, double cab pickups will be classified as cars for tax purposes and they are therefore expected to disappear from the list of options for company cars.
Tax reliefs are still available but planning your fleet may need more tax advice than before, so don’t forget to check before you sign!
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