Key Issues in the Chancellor’s Autumn Budget

Let's talk about the Chancellor's Autumn Budget, shall we? It's like that time of year when your parents decide to update the house rules, and you have to figure out how to survive with the new curfews and chores. The vehicle leasing industry is no different. Here are the key changes coming your way!

Vehicle Excise Duty (VED)

The government is shaking things up with VED First Year Rates for new cars registered on or after April Fools' Day 2025 (no joke). The idea is to make you feel just a little bit guilty about driving anything that isn't a zero-emission car. Here’s the breakdown:

- Zero-emission cars: The golden child of the budget will pay just £10 in their first year until 2029-30. It's like getting a discount for being the teacher’s pet.

- Cars emitting 1-50 g/km of CO2 (hybrids included): These will cost you £110 in 2025-26. Think of it as a moderate slap on the wrist.

- Cars emitting 51-75 g/km of CO2 (also hybrids): These rates will jump to £130 for 2025-26. A bit more of a sting.

- All other cars emitting 76 g/km of CO2 and above: These rates will double in 2025-26. That’s right, double! It's like doubling down on a bad hand.

Don't forget, standard VED rates for all cars, vans, and motorcycles (excluding the first year rates) will increase in line with RPI from April 2025.

Expensive Car Supplement

Ever felt like you're being punished for buying the nice stuff? The government realises the current VED Expensive Car Supplement is a bit harsh on those going green with zero-emission cars. They're thinking about raising the threshold for these eco-friendly rides but only at some future "fiscal event." In other words, maybe someday.

Our Hot Take: We need more carrots to go with these sticks. As the penalties for sticking with internal combustion engines (ICE) grow, it's going to get tougher to switch without more help from the government.

Plug-in Van Grant

Here’s a silver lining: the government is throwing £120 million into the pot for 2025-26 to support new electric vans and wheelchair-accessible EVs.

Our Hot Take: This is a huge win in a tough economic climate. It's like finding out your favourite band is doing a reunion tour. Glad we’ve played a small part in making this happen.

Benefit-in-Kind Rates

Company Car Tax (CCT) rates for 2028/29 and 2029/30 have been set, continuing to push for more electric vehicle adoption.

- EV rates: Going up to 7% in 2028/29 and 9% in 2029/30. Not terrible, but it’s creeping up like your Netflix subscription.

- Hybrids: Rates will rise to align more with ICE vehicles.

- Low-emission PHEVs: A cliff edge hike from 5% to 18% between 2027/28 and 2028/29. That's a jump that’ll make your heart skip a beat.

From April 2026, benefits-in-kind will have to be reported via payroll software for income tax and Class 1A NICs.

Our Hot Take: More certainty is always good, even if the 2% annual increase is more than the 1% we hoped for. It’s like getting a decent Wi-Fi connection in a dodgy hotel: not perfect, but we’ll take it.

Full Expensing

The government is toying with the idea of extending full expensing to assets bought for leasing or hiring when the fiscal stars align.

Our Hot Take: We're gutted this didn’t make the cut. It’s like waiting for your favourite TV show to get renewed. We'll keep lobbying and crossing our fingers.

So, there you have it. The Autumn Budget is here to keep us on our toes and, hopefully, steer us towards a greener future—whether we like it or not!