On Thursday 17th November 2022, the Chancellor of the Exchequer, Jeremy Hunt, delivered his first Autumn Statement. Covering a wide range of topics, his stated theme was "stability, growth and public services", with a number of announcements that will have a direct impact on the fleet industry.
On-demand - Responding to: The Autumn Statement 2022
Watch our on-demand webinar where our consultancy experts provide you with a detailed analysis of what the Autumn Statement means for our industry.
Overview
We are pleased that in the Autumn Statement, the Chancellor has provided clarity for EV fleets and drivers by announcing the Benefit-in-Kind (BiK) taxation rates that will continue to encourage the uptake of EVs and will ultimately help the UK on its road to net zero.
From lobbying directly to MPs in Westminster with the BVRLA to reaching out to Government officials, we’ve been committed to campaigning and educating Government on the pivotal role BiK tax has on the transition to EVs, and our hard work has resulted in minimal BiK tax cost increases for drivers.
Here’s an overview of some of the other key takeaways from the Autumn Statement and other recent fiscal events.
Increase in BiK rates limited to 1% a year from 2025 - 2028
Tax duty
BiK rates to increase by one percentage from 2025 and for a further two years for cars emitting less than 75g/km to a maximum of 21%. Cars with emissions of 75g/km or over will see a 1% increase in 2025 then rates fixed for a further 2 years, to a maximum of 37%.
From April 2025, existing electric cars, vans and motorcycles will begin to pay both first year and standard rate VED in the same way as petrol and diesel vehicles. Electric cars that are registered after April 2025 will be subject to the expensive car VED supplement.
Income tax and National Insurance thresholds will be frozen at 2023-24 levels for a further two years until April 2028.
The 45% additional rate threshold has been reduced to £125,140 (from £150,000).
The basic rate income tax reduction to 19% from April 2024 has been scrapped and will remain at 20% indefinitely.
The 1.25% health and social care levy has been scrapped as of November.
No stamp duty on house purchases up to £250k, increase for first time buyers up to £425k.
Not included in the statement but announced on the same day. There’ll be increase in the Advisory Electric Rate (AER) in December 2022 from 5 pence per mile (ppm) to 8ppm. HM Treasury have also confirmed that the AER will fall in line with the AFR and be reviewed quarterly.
Energy
Energy – Six month freeze in the energy price cap until April 2023, then the price cap will increase to £3,000 for a typical household.
A Windfall tax on the profits of oil and gas firms will increase from 25% to 35% from January 2023 and is extended until March 2028.
From January 2023 there will be a temporary new Electricity Generator Levy of 45% on returns from low carbon UK electricity generation.
OTHER ANNOUNCEMENTS
There will be targeted support with the cost of living for those on low incomes, disability, and pensioners.
NHS budget will increase in the next two years by an extra £3.3bn.
The national living wage will be increased from £9.50 an hour for over-23s to £10.42 from April 2023 and there will be similar National Minimum wage increases (depending on age band) of between 9.7% and 10.9%.
“From trips to Westminster to speak with MPs to reaching out directly to Government officials, we’ve been committed to campaigning and educating Government on how pivotal Benefit-in-Kind tax is on the uptake of electric vehicles. Following the Chancellor’s announcement, we’re thrilled that the work we’ve done in conjunction with the BVRLA has paid off, and Government is continuing to support and recognise the role fleet plays in its net zero ambitions.”
Ian Hughes, CEO - Corporate
