Peter Vosper on the Spring budget and what it will mean for the Motor industry

The Chancellor Jeremy Hunt will deliver his spring Budget next week and we will all be hoping for some good news.

Last year the country ended up in recession, albeit a shallow one, but the burden of higher inflation leading to higher interest rates has put pressure on many individuals, families and businesses.

The challenge for the Government will be get the economy growing again by a combination of positive plans coupled with some tax reliefs, and they will be keen to achieve this with an election likely before the end of the year.

Although many mortgages were on fixed interest rates some will rise this year or next and for those there will be a reluctance to spend money on big items.

The motor industry is one of those who have been struggling with sales, to private and small business buyers in particular, and hope that there is a clear plan to continue to reduce inflation leading to a lowering of interest rates.

Prices have been rising as a result of not only raw material increases but the massive investment in electric vehicles and for a combination of reasons regular readers will be well aware of, sales of electric vehicles have not yet reached the volumes expected.

It is unlikely any incentive to purchase electric cars will be announced at this budget but the Society of Motor Manufacturers and Traders has been lobbying for this for some time.

There is hope the Fuel Duty will continue to be frozen and petrol and diesel prices will remain at reasonable levels. However, the recent drop in used car prices has led to encouraging sales in January and February and with the new 24 plate now upon us there is optimism new car sales will start to grow again.

The manufacturers need to keep sales moving and there are already offers with subsidised interest rates and other ways to keep costs down and the motor industry is used to the ups and downs of the British economy. 

For those of you who use double cab pick-ups with a payload of one tonne or more HMRC have reversed their announcement which stated these vehicles would be treated as cars rather than goods vehicles for both capital allowances and benefit-in-kind purposes. Nigel Huddlestone, Financial Secretary to the Treasury said: “We will change the law at the next available Finance Bill in order to avoid the outcomes that could inadvertently harm farmers, van drivers and the UK’s economy.”

This was not due to start until July 1 so it’s business as usual. A prompt response to an obvious error, which could have hurt many businesses in the South West. 

To avoid doubt double cab pick-ups with a payload of less than one tonne will continue to be treated as cars.