As the dust settles on George Osborne’s budget, we reflect on what it means for the automotive aftermarket.
The general consensus is that the big winners from Wednesday’s announcement are small businesses.
Rates for small businesses often far exceed the amount they pay in corporation tax, and there were hopes they would be reduced.
Those hopes have rung true with the news that 250,000 small businesses will pay lower rates and 630,000 will pay no business rates at all from April 2017.
Philip Johnson, Director of Locate (a company with a mission to support growing businesses in East Sussex), said: “In a period of uncertainty, it is positive that the Chancellor delivered a stable Budget that is promoting continued growth, particularly for Small and medium-sized enterprises (SME) businesses.
“Companies have been concerned about the increasing burden they are facing and it’s good to see the Chancellor is backing business to grow the economy out of the deficit.”
Mr Osborne claims the reduction will save £7bn per year for businesses. The bill for that will fall to big corporations.
The Society of Motor Manufacturers & Traders (SMMT), focussed on the support for energy efficient technologies, but also felt the government could have done more on business rates, despite the benefits to small businesses.
Mike Hawes, SMMT Chief Executive, said: “The 2016 Budget contained some positive measures and we were pleased to see the Chancellor recognise SMMT’s call for greater support for energy efficient technologies, through both the extension of Climate Change Agreements and a forthcoming consultation on the future Company Car Tax treatment of ultra-low emission vehicles.
“However, we were disappointed that the Chancellor has not done more on business rate reform. The removal of plant and machinery from business rates valuation would have encouraged investment in innovative manufacturing technologies, improving still further UK automotive industry productivity and safeguarding our competitiveness.”
Earlier in the year the government had confirmed that driverless lorries and cars would be trialled on UK roads.
It has now also announced that plans for ‘lorry platooning’ trials, in which vehicles form a convoy headed by a driver in the leading lorry, will go ahead.
Alex Holt, Partner and Head of Telecoms at KPMG (a global network of professional firms providing Audit, Tax and Advisory services), said: “I welcome the Chancellor’s encouragement of connected vehicle technology in the UK. While some people may be terrified about the prospect of autonomous or driverless vehicles on the streets of the UK, in my view it’s a reality they’ll need to get used to.
“The Government’s announcement to bring down the regulatory barriers facing autonomous vehicles and establishing a ‘connected corridor’ from London to Dover are the sort of measures that might encourage significant telecoms infrastructure investments. Seamless, high quality and ultra-fast fixed and mobile connectivity is essential for successful and safe deployment of connected vehicles.”
Mr Osborne has also earmarked more than £230m for road improvements in the north of England, including upgrades to M62.
Matt Dyer, UK’s Managing Director at LeasePlan (a lease and fleet management solutions provider) said: “The Chancellor has pledged £50 million Pothole Action Fund for England and £130 million to repair roads and bridges from storm Desmond and Eva”, but warned “there is still an awful long way to go in repairing Britain’s decrepit and pothole-ridden roads.”
