15 March 2020

Chancellor Rishi Sunak unveiled the 2020 Budget on 11th March 2020, stating: “This is the budget of a government that gets things done.”

It was also the Budget of a Government trying to control the effects of a pandemic. This is probably why it promises considerable spending, a large part of which is going towards mitigating the effects of the Coronavirus on the economy.

There is also a promise to improve infrastructure in the form of more roads, superfast broadband and mobile phone networks in rural areas.

Additionally, there are also some efforts to help the environment.

The Budget has been hailed as the ‘end of austerity’ by many. Here are some of the salient points that could affect businesses and fleet operators.

Greener economy

There will be an introduction of a Green Gas Levy to help fund the use of green fuels, as well as an increase in the Climate Change Levy that businesses have to pay on gas. The Levy on electricity will be frozen from April 2022. The argument for this is that electricity is being generated using greener sources, while gas isn’t.

The Budget also includes a Carbon Capture and Storage (CCS) Infrastructure Fund. 

green saplings growing out of a stack of coins

Incentives for ultra-low emission vehicles (ULEVs)

The Budget allocated £532 million towards consumer incentives for ULEVs, with a reduction of taxes on zero-emission vehicles. While polluting vehicles are already being phased out, the Government has allocated £403 million to the Plug-In Grant up to 2023, and another £129.5 million to extend a similar grant for vans, taxis, and motorcycles up to 2023.

Investment in electric vehicle charging infrastructure

The Government plans to invest £500 million in electric vehicle charging infrastructure, promising that drivers will never be more than 30 miles away from a rapid charging station.

Promoting better air quality

The Government will remove the entitlement to use red diesel, except for agriculture, fish farming, rail, and non-commercial heating. Also, local authorities have been provided £304 million to help reduce nitrogen dioxide emissions.

Road infrastructure

With £27 billion set aside for roads, this is the largest ever investment in strategic roads ever. In addition, there is a £2.5 billion pothole fund.

Orange roadworks cones on an empty road

Fuel duty freeze

For the tenth year in a row, there will be a fuel duty freeze, which could save drivers a total of £1,200 in comparison with what they would have paid under the pre-2010 fuel duty escalator.

Statutory sick pay

Statutory sick pay is available to those who have been advised to quarantine themselves, even if they aren’t showing any signs of COVID-19 symptoms. In order to ease the burden on the economy, the Government is going to meet the cost of this for up to 14 days for workers in companies with up to 250 employees.

Financial relief

There has been the introduction of a Coronavirus Business Interruption Loan Scheme for small and medium businesses.

There is also a £3,000 cash grant to businesses eligible for small business rates relief.

National Insurance

The threshold for National Insurance is to rise from £8,632 to £9,500, which means a typical employee should save £104 annually.

Corporation Tax

The Corporation Tax is not going to be cut down to 17% and will remain at 19%.

Further reading

In addition to the latest Government announcements, there have been several ongoing developments in vehicles and transport infrastructure. Here are some that might be of interest.

If you need help with fleet management and leasing, employee benefits solutions, and driver services, call us on 0844 854 5100 or email CSalmon@sgfleet.com to find out more.

Wooden blocks saying 'Budget 2020' arranged over a stack of coins