Budget Aftermath: Fleet Operators Set to Suffer Due to VAT Increase
The Budget statement also brought with the VAT increase, news of changes to capital allowances rules with restrictions to the relief given on capital expenditure. The new government will be slashing the tax relief from the GBP 100,000 provided by the last Government only in March after a GBP 50,000 increase, to just GBP 25,000 in April 2012. The writing down allowance will also be reduced from 20% to 18%.
Overall, there are calls for motor fleet companies to be creative in business ahead of these changes to make sure they are not affected too drastically when they do come into action. However, there will also be some relief provided in the way of a reduction in the small profits rate from 21% to 20% the conventional rate of corporation tax in stages across four years from 28% to 24%. There is also no change to fuel duties, which will be welcome news to most.
The increase in Insurance Premium tax is a worry for Fleet Insurance, however, with many fleet insurance providers worried that the 1% rise from 5% to 6%, although not great, when coupled with the other increases in general will deter motor fleet companies from purchasing cover.
Flint Insurance, a leading Motor Fleet Insurance provider in the UK, said: 'There is some concern that the combined effects of the Budget outcome will result in many uninsured fleet companies, but we cannot stress enough how important it is to gain cover as without it things could be a lot worse. There may well be tough times ahead, but there is also some relief provided by the announcement and companies just need to ensure they take stock in advance and make provisions'.
The new coalition Government has also stated that it will be committed to helping funding and encouraging banks to lend, which would be a huge help to fleet companies who will no doubt be watching closely to see if this does indeed transpire.
About Flint Insurance:
Based in Sidcup, Kent, Flint Insurance is an independent broker offering motor fleet insurance to companies from across the UK. By using a panel of leading insurers, they can offer the most appropriate cover and the most competitive quotes. To find out more, visit: www.flintinsurance.co.uk.
