THE fleet industry gave a collective shrug to last week’s budget, which provided more questions than answers after major decisions were delayed again on key issues such as the reviews of employee car ownership schemes (ECOS) and approved mileage allowance payments (AMAP).

Although some announcements were made, such as the changes to Vehicle Excise Duty to penalise high-emitting and incentivise cleaner cars and inflation-linked rises in fuel duties, chancellor Gordon Brown sidestepped the major issues, meaning more uncertainty for fleets and suppliers.

A spokesman for fleet managers’ association ACFO said: ‘It’s a major disappointment that after at least a year and two sets of wide-ranging consultations, Her Majesty’s Revenue & Customs is still not able to offer a clear strategy on how it may, in future, deal with ECOS and AMAP arrangements.’

The government is concerned that the current situation with ECOS encourages drivers to drive more miles in order to maximise the benefit of mileage rates, flying in the face of its strategy to encourage greener travel.

But despite consulting the fleet industry extensively, it has yet to come to a conclusion about whether this is the case, leaving firms with ECOS, and suppliers selling them, waiting to see if circumstances will change.

Richard Schooling, commercial director of Alphabet, which has a number of ECOS products, said: ‘It’s always better to be consulted than be dictated to.

‘But this business of extending and re-extending consultations on key fleet issues is becoming something of a budget habit. The budget has put many firms’ fleet policy development plans on hold.’

Experts believe that when changes do finally come, AMAPs will be linked to CO2 emissions.

Jim Salkeld, managing director of ECOS supplier Opticar, said: ‘The review has not resulted in any conclusions but this is not surprising given their complexity and variety.

‘If the proposal is to consider the alignments of AMAPs to emissions, this would probably not be unwelcome to employers, although the actual numbers would have to be examined quite closely.’

However, a fillip for ECOS providers was found in Mr Brown’s 2% reduction in the standard rate of income tax, taking effect from April 2008, which will reduce the tax and National Insurance Contributions for ECOS drivers.

How your fleet will be affected

  • Driver BIK – largely unchanged. Starting rate frozen at 135g/km for tax year 2009/10. A new band for biofuel announced for April 2008. Driver BIK on fuel for private use also largely unchanged. Fuel charge remains at £14,400.

  • VED – petrol rates brought up to diesel levels in all CO2 bands, reductions for lower-emitting bands (C to E), modest increase for band F and a new rate starting at £300 per year and rising to £400 for 2008.

  • Corporation tax/writing down allowances/lease rental disallowances – more consultation and no date announced for any changes. Preferred option of Her Majesty’s Revenue & Customs is to move to a 21-band, CO2 driven system.

  • Employers’ VAT on Fuel Scale Charge – minor change expected on May 1. The VAT issue only arises on employers who provide fuel for private use of a company car. Current five-band system (three cc bands for petrol/two for diesel) will be replaced by a BIK-style 21-band scale based on CO2.

  • Fuel Duties – inflation-linked levels of increase in most road fuels, deferred until October.