Commenting on today’s Budget, SMMT chief executive, Paul Everitt said, “Measures to encourage more and better priced lending to consumers and businesses, alongside additional support for investment in low carbon vehicle technologies are further evidence of the new priority given to UK motor manufacturing. There is disappointment that the introduction of first year VED rates has not been deferred, but the doubling of the annual investment allowance will give a lift to the commercial vehicle market.”
A series of measures supporting companies throughout the UK motor industry were announced, designed to support investment in ultra-low carbon technologies:
- £30 million allocation from the Strategic Investment Fund to support development of low carbon vehicles.
- A Nuneaton ‘intelligent transport technology’ test centre.
- The Technology Strategy Board’s competition to develop low and ultra-low carbon vehicle supply chains.
- A second Green Bus competition.
- Commitment to greater support for SMEs through the UK ‘finance for growth’ scheme and provision of measures to encourage lending.
Furthermore, government took action to encourage business investment in new vehicles and specifically in ultra-low carbon technology by:
- Introducing a lower 5% rate of company car tax for vehicles emitting between one and 75g/km CO2.
- 100% first-year capital allowance for zero-carbon goods vehicles.
- Doubling the Annual Investment Allowance for small businesses to £100K (industry seeks clarity on whether this measure also extends to larger businesses).
The success of the Scrappage Incentive Scheme was credited with a 30% rise in sales against expectations, with government reiterating the importance of a balanced economy and the key role manufacturing has to play.
Budget specifics:
- VED: Vehicles emitting less than 130g/km CO2 will pay no VED; vehicles with over 165g/km CO2 will pay additional VED for the first year graduated up to £950.
- VED discounts of up to £500 for HGVs with Reduced Pollution Certificates – for vehicles that show early compliance with Euro 6 air quality standards.
