Insight: Chancellor saves fleets millions of pounds

Fleets are expected to save millions of pounds thanks to a range of measures announced in the Autumn Statement.

The decision to ditch the tax disc was hailed as a major victory for the BVRLA and ACFO. Both have campaigned for the Department for Transport to axe the tax disc for a number of years, as part of a wider streamlining of DVLA services.

ACFO chairman Damian James said: “Removing the tax disc reduces the administrative burden on fleet managers and vehicle leasing companies, particularly in terms of forwarding a new disc to drivers.”

Once used as a visible means of demonstrating that a vehicle has been taxed, the disc is no longer required because this can be instantly confirmed by accessing DVLA computers.

BVRLA chief executive Gerry Keaney said: “We estimate that removing this piece of paper would save the Government £3 million a year and save fleet operators £10m.”

Since the DVLA closed down regional offices, the process for getting a tax disc had become quite difficult. Motorists and businesses could wait weeks for the paper tax disc to arrive in the post – but now this process can be completed online. The changes are expected to come into effect from October 2014.

Chancellor George Osborne also announced the planned fuel duty increase for September 2014, expected to be worth 1.61p per litre, will be cancelled, saving the fleet industry around £186m.

However, the Freight Transport Association (FTA) said the freeze was good, but not good enough. “While FTA is delighted with the Chancellor’s confirmation that fuel duty will be frozen next year, we would have liked more, with a cut in fuel prices rather than just a freeze,” said Theo de Pencier, the FTA’s chief executive.

New comparison road signs, which will show prices at different service stations along a route, will also be trialled in an attempt to bring down the high costs of fuel on motorways.

In addition, the fuel duty differential between the main rate of fuel duty and the rate for road fuel gases, such as liquefied natural gas (LNG) and compressed natural gas (CNG), will be maintained at current levels until March 2024.  The differential between the main rate and the liquefied petroleum gas (LPG) rate will reduce by 1ppl in each year to 2024.

The Chancellor says the move will provide businesses with the certainty they need to invest in alternatively fuelled commercial vehicles.

However, Linda Gomersall, general manager at Autogas, said: “It’s not clear why LNG and CNG are being treated differently from LPG. All have similar environmental credentials but LPG is the only one to offer a reliable nationwide supply infrastructure, used daily by thousands of drivers.”

The Government will review the impact of these incentives on vehicle uptake and the public finances at Budget 2018.

Meanwhile, the Treasury has published the fuel benefit charge multiplier for company cars, which relates to employees who receive free fuel from their employers, and who do not reimburse their employers for the private use element of that fuel.

The car fuel benefit charge multiplier will rise from £21,100 in 2013-14 to £21,700 in 2014-15 and the van fuel benefit charge increases from £564 in 2013-14 to £581 in 2014-15, while the van benefit charge will rise by £90 to £3,090 over the same period.