Matt Sutherland, chief operating officer, Alphabet GB Limited examines what the general election result means for the UK and the UK fleet market.
The outcome of the General Election has caused widespread uncertainty among the business community. The Institute of Directors yesterday announced that there has been a ‘dramatic drop’ in business confidence since the result was announced.
Now that the prime minister, Theresa May, is running a minority government with an expected shelf-life of weeks or months rather than years, the likelihood of planning and implementing policies with long-term vision is remote. This will have a huge impact on businesses, who are looking for some certainties beyond 2020. The immediate focus both for Government and industry has to be ‘getting back to business’.
From a fleet industry perspective, we need to look ahead to the Autumn Budget expected in November. We’re currently in a situation where business leaders and fleet decision makers are having to make medium to long-term decisions about vehicles and mobility without knowing the tax framework or its implications beyond April 2020. Everyone knows that businesses thrive on certainty, not guesswork.
It is entirely likely the Government’s plans to impose new company car benefit-in-kind (BIK) tax bands – removed from the Finance Bill to secure its passage ahead of the snap General Election – will be restored in the Autumn Budget. These will mean tax bandings for sub-75g/km ultra-low emission vehicles (ULEVs) will rise steadily in the period to 2019/20 – even rates for zero emission cars will reach as high as 16 per cent BIK.
The fleet and mobility industry will watch with keen interest to see whether the new Government brings clarity and simplification to the taxation framework, enabling businesses to plan their longer-term mobility strategies, as well as supporting the movement towards ULEVs which is still in its early stages. It is important that with the current uncertainties and lack of clarity, UK businesses do not to make a knee-jerk reaction which will could cost them in the long run.
It is so important that government recognises the vital role that fleet vehicles have played – and will play – in keeping the UK economy moving while supporting the growth and take-up of low emission, sustainable transportation.