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News digest 18 August 2017

A round-up of this week’s news from the world of fleet.

New car market falls for fourth consecutive month

The new car market fell by nearly 10% last month, with sales of diesel cars down by a fifth, industry figures show.

This is the fourth consecutive month of decline in sales of new petrol and diesel cars.

But sales of alternatively fuelled vehicles rose 64.9% in July, giving them a record market share of 5.5%.

Just under 162,000 new cars were registered in July, down 9.3% on the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).

Some 1.56 million new cars have been sold so far this year, a decrease of 2.2% on the same period in 2016.

Registrations of new diesel cars fell 20.1% in July, with petrol models down 3%.

Last month, ministers announced a clean air strategy to ban the sale of diesel and petrol cars by 2040 as part of plans to meet legal European Union limits on harmful nitrogen dioxide pollution.

They are also considering funding measures to cut pollution with a tax on new diesel vehicles.

Company car figures hits five-year high

The number of employees with a company car has grown to a five-year high according to figures from HMRC.

The provisional numbers reveal 960,000 employees paid benefit-in-kind (BIK) tax on a company car in 2015/16 – a 1% rise on the revised figure of 950,000 recorded the previous financial year.

The combination of BIK tax and national insurance contributions (NICs) is now worth £2.08bn to the Treasury, compared to £1.92bn in 2014/15 – an increase of 8% or £160 million.

Employment tax and company car specialist Alastair Kendrick, told Fleet News: “It will be interesting to see whether increases in BIK [rates], and the question mark over diesel, will lead to some slight reductions [in the number of employees paying company car tax].”

Overall, the HMRC data shows the number of recipients of taxable benefits in kind increased slightly to 3.76m in 2015-16. The total taxable value also increased to £8bn – up £400m on the previous financial year. More than half (54%) of that £8bn was down to the company car parc, with private medical and dental insurance responsible for almost a quarter (23%), and ‘free’ fuel 9%.

FTA warns clean air uncertainty could ‘hurt industry’

The government’s clean air quality plan needs greater clarity to avoid putting fleet-dependent companies out of business, an industry body has warned.

The Freight Transport Association said there is an urgent need to identify which vehicles will be affected in each of the Clean Air Zones following the government’s announcement on air qualities.

In addition to the Ultra Low Emission Zone in London, there are five other cities (Birmingham, Derby, Leeds, Nottingham and Southampton) which will have to introduce Clean Air Zones (CAZs) by 2019.

FTA is calling for clarity as to which vehicles will be affected as soon as possible and are concerned that businesses – particularly small businesses – do not have enough time to ensure their fleets are compliant with the new legal requirements.

The industry body said businesses based within zone boundaries will need additional support. Many businesses will now be locked into lease agreements of non-compliant vehicles, which extend beyond the 2019 deadline and will be costly to get out of, the FTA warned.

Elizabeth de Jong, FTA’s Director of UK Policy, said: “Uncertainty will hurt industry – FTA understands we won’t know where lorries and vans will be restricted until next year, giving only a year for businesses to plan their fleets, leaving many with potentially large bills on top of rising operating costs in a difficult trading environment.”

She continued: “For those whose businesses operate inside a zone, a period of grace, giving them extra time to comply, would provide much-needed breathing space.  Our worst fear is that some may be forced out of business altogether if the plans are not properly thought through.

“FTA is offering its experience and expertise to work with the local authorities affected, to help them develop their plans so that they achieve their aims of reducing NO2 whilst supporting businesses and the economy.”

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