Industry reacts to the Autumn Statement
Chancellor Jeremy Hunt’s first budget contained some positives for the bus and coach industries. Here’s how trade associations and others reacted
At the Spring Budget 2023, the government replaced the super deduction regime with ‘full expensing’ for 3 years from 1 April 2023, allowing businesses to write off the full cost of qualifying plant and machinery investment against their taxable profits.
The government is now making this change permanent with a 100% first year allowance for main rate assets and 50% first year allowance for special rate (including long life) assets.
Research & Development
The existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 to be claimed in the merged scheme. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25% as per the current RDEC scheme, to 19%.
The intensity threshold in the additional support for R&D intensive loss-making SMEs will be reduced from 40% to 30%, bringing approximately 5,000 more R&D intensive SMEs into scope of the relief. In addition, the government is introducing a one-year grace period, so that companies that dip under the 30% qualifying R&D expenditure threshold will continue to receive relief for one year.
Investment Zones Programme Extension
The Investment Zones programme in England will be extended from five to ten years and three new zones were announced in Greater Manchester, West Midlands and East Midlands.
The government will introduce a business rates support package worth £4.3bn over the next five years to support small businesses and Retail, Hospitality and Leisure (RHL).
This includes extending the 75% relief for RHL for 2024-25, up to a cash cap of £110,000, and freezing the small business multiplier for a fourth consecutive year. The standard rate multiplier will be increased in line with CPI inflation.
Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT)
The EIS and VCT reliefs were due to expire after 5 April 2025; new legislation will be introduced to extend the lifetime of these reliefs to 2035.
“Today’s Autumn Statement has welcome news for the road transport industry on Vehicle Excise Duty (VED), business investment and planning reforms.
We are delighted the Chancellor has listened to RHA’s campaigning efforts on several fronts. Hauliers and coach operators keep goods and people moving – and are vital to our economic vitality.
We welcome the announcement on full expensing to make the change announced in the Spring Budget permanent. Firms will be able to claim back the tax on buying new plant and machinery, including vans, lorries, [PSVs], and warehousing equipment.
We are also pleased that that the Chancellor acknowledged concerns that planning is often a barrier to investment in major infrastructure. The introduction of a premium planning service with guaranteed accelerated decision dates for major applications and new powers to hold councils to account is welcome. A strong network of safe, secure roadside truck parking facilities is a key priority for us.
The new Investment Zone deals are much needed and we urge that they’re supported with high-quality road infrastructure. We also support Government action in creating more certainty for investors in low-carbon infrastructure. This is through extending the critical national priority designation for nationally significant low-carbon energy projects.
We continue to call on the Government to introduce an emissions-linked rebate to encourage hauliers and coach operators to switch to low-carbon fuels such as HVO. Finally, the £2 billion funding being made available to support the manufacturing and development of zero-emission vehicles is welcome, however we need to see more concrete plans on how this funding will be targeted towards commercial vehicles.”
Confederation of Passenger Transport:
CPT’s CEO Graham Vidler said: “The £2bn earmarked to support the manufacturing, supply chain and development of zero-emission vehicles is potentially good news for the bus and coach sector. The government now needs to ensure a significant proportion of this funding is invested in delivering greater battery ranges for buses and coaches and a sustainable model for hydrogen fuel cells, to accelerate the bus and coach sectors’ transition to zero emission.”
The Chancellor’s announcement did however miss the chance to complete the National Bus Strategy, after the welcome funding for services in the North and Midlands last month.
Vidler added: “It is a shame, though, that the Chancellor has not taken the opportunity today to replicate the recent investment for buses in the North and the Midlands across the rest of the country. Frequent, fast, reliable buses are required by millions of people every day to get to work, school, and access essential services. Communities in the South are at risk of being left behind without matched investment. This should not be a postcode lottery.”
Campaign for Better Transport:
Ben Curtis from Campaign for Better Transport said: “We are disappointed that the Chancellor did not include any transport measures in his Autumn Statement today, despite a focus on lifting people out of poverty. We know that a lack of access to affordable public transport contributes to financial inequality, unemployment and social isolation, so transport should be at the heart of Government investment priorities.”
Joss Croft, CEO, UKinbound, said: “Today’s Autumn Statement fails to harness the substantial economic growth potential of the UK’s inbound tourism industry, disregarding the sky-high price of international travel, which leaves us one of the most expensive countries in Europe to visit.
“The UK is at a significant competitive disadvantage but with the right support from Government, international tourism to the UK could immediately and significantly boost businesses and local economies throughout the four nations.
“The failure to bring back VAT refunds for international visitors is a significant oversight and one that will hit UK high streets and boost those in France, Germany and Italy.
“We remain committed to working with the Government to boost UK economic growth via inbound tourism, but today’s Autumn Statement is a missed opportunity that must be corrected in as quickly as possible.”