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VAT rate and IPT increase
From 4 January 2011
VAT rises from 17.5% to 20%
Higher rate of Insurance Premium Tax rises from 17.5% to 20%
Lower rate of Insurance Premium Tax rises from 5% to 96%
Main rate Corporation tax will be reduced from 28% to 27% from 1 April 2011. There will be further 1% reductions each year, leading to a 24% rate by 1 April 2014.
Small business the small profits rate (SPR) of corporation tax (CT) will be 20% from 1 April 2011.
Writing Down Allowances (Capital allowances)
Writing-Down Allowances (WDAs) for new and unrelieved expenditure on plant and machinery will change as follows:
From 20% to 18% per annum for expenditure allocated to the main pool (this will affect expenditure on cars emitting 160 g/km or less CO2 and all commercial vehicle)
From 10% to 8% per annum for expenditure allocated to the special rate pool (this will affect expenditure on cars emitting more than 161 g/km CO2)
The first measure will have effect for the calculation of WDAs for chargeable periods ending on or after 1 April 2012 for corporation tax and on or after 6 April 2012 for income tax.
Fuel duty
The current increases will remain as 1p in October 2010 and the final 0.76p in January 2011. Thereafter, the increase will be 1p per litre above inflation each year up to 2014.
Fair Fuel Stabiliser
The office for Budget Responsibility is to undertake an assessment over the summer of the effect of oil price fluctuations on the public finances. Informed by this assessment, the Government will examine options for the design of a fair fuel stabiliser.
Reflecting the Coalition commitment to investigate measures to help with fuel costs in remote rural areas, the Government is considering the case for introducing a fuel duty discount in remote rural areas. This includes possible pilot schemes in Scotland.
Good vehicles – First year allowance
From 6 April 2010, businesses will be able to claim 100% first-year allowance (FYA) for the purchase of zero-carbon goods vehicles and it will be in place for five years. This will not be available for expenditure on leased assets. BVRLA will be lobbying for this to be changed given the role the sector will be playing in supporting the take up of greener vehicles.
Company Car and Van Tax (Benefit in Kind)
The Chancellor has confirmed in his emergency budget the changes announced in April.
VED changes
The previously announced VED changes to Heavy Goods Vehicles (HGVs) will take effect from 1 April 2011. From this date, additional HGV VED rates will be introduced based on weight and suspension type.
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Days Contract Hire are a nationally based, family run company who specialise in fleet management solutions, leasing services and offering our specialist advice to all our clients. We have been in the Contract Hire business for over 20 years and have amassed an enviable reputation for the way we run our business and the services we offer to the public. If you have Contract Hire requirements and want to discuss the matter further, please don’t hesitate in contacting Days Contract Hire.
