Guest post by Nigel Underdown, Head of Transport, Energy Saving Trust

 

Vauxhall-ampera_6 Budget days lost some of their surprise factor long ago with the introduction of the Autumn pre budget report. And yesterdays’ announcements were always destined to be a careful mix of reassuring the markets and keeping voters on side for the forthcoming election. Above all nobody was expecting anything by way of giveaways at a time that we battle with record levels of public debt and most of us were looking for how the Chancellor would increase the tax take to balance the books.

 

 

 

So something of a surprise lurked in the small print of the 2010 budget.  For a select group, Alistair Darling announced a halving of income tax. With effect from April 2010 and for the next five years, drivers of company cars emitting 75gms /km or less will pay half the current benefit in kind taxation. This follows previous announcements that electric vehicles (zero tailpipe emissions) will attract no liability for company car tax. The cynics will (correctly) point out that today, no car is available in the UK market  (other than electric) which achieves this low level of emissions so those in a rush to improve their personal finances will be hard put to exploit this concession. 

 

 

2010-Toyota-Prius-23800But nobody should doubt the significance of these and other moves to incentivise the market for ultra low carbon vehicles. For many years manufacturers have complained that their product development plans (often 5-10 years hence) desperately needed more clarity from government on terms of fiscal policy. Well they should have little doubt now that the financial case for low emission vehicles is stronger than ever and the cost penalties for continuing to produce gas guzzlers could seriously damage their sales results.

 

By the way, if you are desperate to choose your next company car and exploit Alistair Darling’s giveaway, I know of only two cars which will deliver sub 75 gram performance and you’ll have to wait for those. The plug in Toyota Prius is likely to be available from 2012 and similarly the Vauxhall Ampera.