SMMT chief outlines how governmen cash can help UK car industry
26 March 2009

The Society of Motor Manufacturers (SMMT) has called on chancellor Alistair Darling to use next month’s budget to kick-start sales in the new car market, saying that the UK motor industry is close to a "state of emergency".

Paul Everitt, chief executive of SMMT, said, "The UK motor industry is reaching a state of emergency and the rate of government action is crucial to the future success of the sector.

"The government must use the budget to boost consumer confidence and kick-start the market with a scrappage incentive scheme to encourage private sales and tax changes to generate business sales."

Other proposals include:

  • Removing or delaying the planned 2010/2011 introduction of a first-year rate of tax on new cars.
  • 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 3 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.
  • Mark Tisshaw

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