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The automotive industry has given a mixed response to the Autumn statement from the Chancellor of the exchequer, George Osborne who announced a range of measures including changes to Stamp Duty, a £100 increase in personal tax free allowances, ISA inheritance, business rates, allowances for apprentices, bank corporation tax and science investment.

Coolin Desai, transport and logistics industry leader at PwC, said, “The planned investment in road and rail infrastructure will be welcomed by both transport businesses and their customers. Improvements in capacity and quality are essential to support economic growth. Improved rail infrastructure and better rail operations are critical to improving transport links, re-balancing the economy across the regions, and improving the passenger journeys. We welcome the announced investment in the rail sector. The challenge for government is whether it has the capability and capacity to accelerate these improvements and realise these benefits sooner.”

John Leech, Head of Automotive for KPMG in the UK, said, “The automotive sector will be pleased to hear that the Government plans to review business rates. This is a tax that is not linked to ability to pay and is much higher than equivalent taxes in other EU countries. For the automotive industry it discourages investment in the UK and it’s expensive too – currently the business rates impose a 48% tax on the increase in rateable value estimated from investment in property, plant and equipment. The reform of business rates will boost investment by automotive companies and therefore help to rebalance the economy, but it needs to be implemented quickly to capitalise on the favourable investment climate. The automotive sector will also welcome scrapping national insurance contributions on apprentices aged under 25 years which should help to boost youth employment and the development of skills in the industry.”

Tim Lewin, tax partner at Automotive industry accountants ASE welcomed the Chancellor’s changes saying, “A positive statement from the Chancellor which will benefit the motor trade and ASE clients. With savings for many individuals resulting in an increase in their disposable income and perhaps leading to an increase in vehicle sales, plus the benefits from the tax incentives on research & development and capital allowance as good news for enhancing dealership profitability.”

Simon Elliott, the managing director of truck supplier MAN Truck & Bus UK welcomed Mr Osborne’s infrastructure investment, saying, “The UK’s priority must be to invest in improved roads and inter-city links. We are pleased that Mr Osborne recognises this and we look forward to seeing how his proposals are rolled out.”

Looking at things from the miotorists point of view, David Bizley, chief engineer at the RAC, said, “The negative impact of fuel duty on economic growth is now acknowledged by the Treasury. With fuel duty already frozen until May 2015, we had feared an early return to the fuel duty escalator system – a deeply unpopular practice which led to a series of fuel duty hikes – but, for now, it appears that is not going to be the case. While we are currently enjoying low pump prices as a result of the lower world oil price this may change quickly, and it will be reassuring to fleet managers that the taxation scheme is not about to change.”

In their response to the Autumn statement, the trade body for dealerships and garages, the RMI have said:

BUSINESS RATES
The RMI welcomes the extension of the small business rate relief scheme for a further year. The announcement that rates will continue to be capped at 2% next year will be of great benefit to our smaller members.
News that small businesses with premises with a rateable value of under £50,000 will receive a discount of £1,500 which will provide welcome relief to RMI’s very small members.

CORPORATION TAX
Whilst the RMI are encouraged by the reductions already introduced by Government we are disappointed that further reductions to corporation tax were not announced in the Autumn Statement. The UK needs to ensure that it has the most competitive regime for businesses to encourage inward investment and business start up and a cut to corporation tax would have supported this.
We will watch with interest how the discussions on the devolutions of tax powers to Scotland and Northern Ireland develop and will lobby to ensure that any changes are of benefit to our members.
APPRENTICESHIPS
The RMI is positive by the announcement that employers National Insurance for apprentice’s under-25 will be scrapped, and that all national insurance will be abolished altogether for apprentices.

FUEL DUTY FREEZE
The RMI remains optimistic about the news that the chancellor has ruled out an increase in the duty on petrol. This will encourage consumers and businesses to buy vehicles including cars, motorbikes and commercial vehicles and will also give them more money to cover other motoring costs such as service and repair.
Furthermore, the RMI supports the announcements for income tax duty that will give consumers more money to spend which will in turn support the retail motor industry.

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