Car makers' trade body says the industry needs more help
23 April 2009

The Society for Motor Manufacturers and Traders (SMMT) has vowed to keep pushing the government for more concessions for the car industry, after securing the scrapping incentive in yesterday's Budget.

The SMMT, which represents the UK's car manufacturers, is due to meet government officials next week to finalise the details of the scrappage scheme.

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However, its chief executive, Paul Everitt, has vowed to keep pushing for more aid for struggling car makers.

"The anecdotal evidence is that people have already been into showrooms asking about scrappage, but it's our opinion that there is still more to be done," said Everitt. "We set out a pack of measures that we wanted, and so far we have scrappage and access to loans.

"We are still looking at things like improving access to consumer finance and help for short-term working hours, plus a range of other measures."

In an open letter to the government last month, the SMMT demanded:

  • Removing or delaying the planned 2010/2011 introduction of a first year rate of tax on new cars.
  • Increasing the Annual Investment Allowance for businesses to £500,000 to boost spending on vans, trucks, construction equipment, buses and coaches.
  • Enhancing the Reduced Pollution Certificate discount for trucks, buses and coaches to incentivise the purchase of Euro 5 vehicles through reduced VED rates.
  • Deferring the new CO2-based business car capital allowance regime to 2010/11 to avoid tightening the squeeze on cash flow for business car users.
  • Delaying the introduction of the new standard Benefit-In-Kind (BIK) tax regime for the use of demonstrator and stock-in-trade cars to ease the unplanned cost adjustment burdens facing many employers and employees.
  • Removing the three per cent diesel car penalty in the company car BIK calculation.
  • Deferring the third stage of increases to DVLA first vehicle registration fees.
  • Encouraging enhanced vehicle replacement in government departments and agencies in 2009 and 2010.
  • However, in addition to scrappage the Chancellor also announced Vehicle Excise Duty road tax 2009/10 rate changes will take effect from 1 May, 2009 and that the first year VED rate as announced in November’s pre-Budget report will take effect in 2010/11.

    There will also be changes in company car benefit-in-kind tax from 6 April, 2011. These will result in:

    - the CO2 emissions thresholds for main company car tax bands being shifted down by 5g/km.

    - the £80,000 cap on company car list prices for the purposes of calculating company car benefit being abolished so that all company car drivers pay a fair rate.

    - discounts for early-uptake Euro 4 standard diesel cars, higher-emitting hybrid vehicles, gas-powered and biofuel-capable cars will be abolished, in favour of a system that simply rewards lower tailpipe CO2 emissions.

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