Earlier this month, the Chancellor made the Government’s annual Budget statement, with good news for commercial fleet operators. They’re amongst the many businesses across the country keen to find out what it means for them at such a difficult time of economic recovery.
It was largely good news for vehicle operators with freezes in fuel duty and vehicle tax for HGVs. In addition to this, the extension of the furlough scheme until the end of September benefits business owners who are struggling to operate at full capacity. That said, relief in the short-term could mean more squeezes will come in future years.
How long can fuel duty stay frozen?
The annual Budget has delivered a freeze in fuel duty for the last eleven years in a row. Whilst good news for the next twelve months ahead, it begs the question of how much longer can it remain this way? The Treasury has stated that the UK’s commitment to net-zero carbon emissions by 2050 will mean future fuel duty rates must be considered.
The All-Party Parliamentary Group on Road Freight and Logistics have been calling for a fuel duty rebate, particularly for the haulage industry. Chair of the group, Sir Mike Penning MP, said: “Our haulage industry will be vital to our economic recovery and the Chancellor must ensure that they are not held back by paying the highest rate of fuel duty in Europe.”
VED freeze favours HGVs
In order to support the haulage industry and large fleet operators, the Government announced that it will freeze Vehicle Excise Duty for HGVs for the next twelve months. In addition, the HGV Levy would continue to be suspended for a further twelve months from August 2021.
While this continued freeze will be welcomed by HGV operators, VED rates are due to go up in line with RPI (Retail Price Index) for cars, vans and motorcycles. This means that small-to-medium businesses relying on vans may notice increases when it comes to taxing those vehicles from April.
For a more detailed outlook at what Budget 2021 means for commercial vehicle operators, check out this article from Commercial Fleet or visit the Government website for a wide range of Budget information.