Positive reactions – UK automotive industry upbeat about 2020 budget

As we have seen, when the Chancellor of the Exchequer, Rishi Sunak, presented his first Budget to Parliament it contained a number of potential automotive demand drivers. But how has the industry responded to the proposals? Here are some of the reactions of the various sectors of the automotive industry.

IGA “pleased”

The Independent Garage Association (IGA) is pleased by the changes being made to small business rates.

“It is a welcome move from the government to abolish the rates in the retail sector. Most independent garage businesses have a rateable value of under £51,000, and will benefit greatly from this.” commented Stuart James, IGA CEO.

“The cost of running a garage and investing in new equipment, coupled with the shortage of skilled technicians, is a significant concern for garage owners and this measure will be a great help.”

The Chancellor also announced £2.1 billion would be made available for grants of £3,000 for any business which qualifies for small business rates relief. The 100 per cent retail discount will be extended to eligible retail businesses, meaning a total 12-month exemption for retail outlets from the 6th April 2020. This is estimated to save each business up to £25,000.

Petrol retailers “delighted”

Brian Madderson, Chairman of the Petrol Retailers Association (PRA), said “We are delighted by the provisions made by the Treasury on key issues impacting independent petrol retailers.”

Madderson spoke to Matthew Dix, Head of Commercial Property Tax at the Treasury, who confirmed the abolishment of business rates for the tax year 2020-21 for small businesses in the retail sector. This applies to businesses with a rateable value of less than £51,000 and will be of enormous help to filling stations in order to cope with the economic hardship of coronavirus.

The freeze on fuel duty for another year is also welcome, keeping fuel costs down for consumers. We are also pleased with the decision to exclude the agriculture industry from the abolishment of the red diesel tax relief, especially in relation to the recent floods in the northern former ‘red wall’, to keep the sector thriving.

Additionally, the proposal that legislation will be introduced to protect access to cash is also a good step in maintaining millions of people’s access to their money.

Madderson continued, “This Budget will be beneficial for our members, and will help them maintain strong business activity in a period of uncertainty.”

Car dealers (NFDA) pleased about VED

Sue Robinson, Director of the NFDA, which represents franchised car and commercial vehicle retailers in the UK, outlined the main points which will affect NFDA members

The Government has announced it will provide £403 million for the Plug-in Car Grant, extending it to 2022-23. The government will also provide £129.5 million to extend the Plug-in Grants for vans, taxis and motorcycles to 2022-23.

“NFDA will be liaising with the Government to understand the details of the incentives that will be provided to motorists for the purchase of ultra-low emission vehicles. We will keep our members informed”.

The government is publishing a call for evidence which will include how VED can be used to support the take-up of zero and ultra-low emission vehicles and reduce overall emissions from road vehicles

“Following our lobbying efforts, we are pleased to see that the Government will publish a call for evidence on VED. NFDA will continue to liaise with the Government to outline franchised dealers’ priorities on the issue. Additionally, we are pleased to see that zero emission cars will be exempted from the Vehicle Excise Duty VED ‘expensive car supplement’”.

As set out in July 2019, the Government will reduce most CCT rates by 2 per cent in 2020-21 for cars first registered from 6 April 2020. Rates will return to planned levels over the following two years, increasing by 1 per cent in 2021-22 and 1 per cent in 2022-23. Rates will then be frozen until 2024-25. Further clarity on the company car tax is positive news for businesses”.

And therefore the consensus appears to be positive, with the garage, petrol retailers and franchise dealers all having something to be happy about. But these are the knowns. The unknown impacts of coronavirus and Brexit remain to be seen.