The Society of Motor Manufacturers and Traders has called on the Government to keep fiscal pressure and regulatory burden off automotive businesses to help the industry sustain a recovery.
The SMMT wants VAT kept at 15% before phasing in rises gradually in 2010 to avoid a tail off in consumer demand. The body also wants the Government to defer showroom tax and remove the 3% diesel car penalty in the company car Benefit in Kind calculation.
The message was delivered on behalf of the automotive industry in a letter to chancellor Alistair Darling ahead of the 2009 Pre-Budget report which will be revealed on December 9.
The SMMT is calling for a sustained and strategic approach to recovery from the Government to allow the UK motor industry to bounce back and plan ahead with confidence.
The SMMT said: "The Government must reduce financial and legislative burdens to help generate demand, especially for premium vehicles and in the hard hit commercial vehicle market."
The SMMT also wants the Government to:
- Encourage commercial vehicle purchases by maintaining and increasing the enhanced writing-down allowance to 60%.
- Reconsider lifting the expensive car cap (£80,000) in the company car tax regime to remove the stigmatising effect on UK premium products during these difficult market conditions.
- Make an exceptional enhancement to the Annual Investment Allowance, increasing it to £500,000.
- Speed up the release of funds from the Automotive Assistance Programme.
- Prioritise funding for the research, development and demonstration of technologies required to deliver future low carbon vehicles.
- Maintain a consistent policy in support of alternative technologies and infrastructures being developed as part of low carbon vehicle strategies.
- Continue consistent and durable incentive programmes for biofuels, ultra-low carbon vehicles and their associated infrastructures.
- In particular, Government should urgently reconsider the removal of the 20ppl duty incentive for biofuels scheduled for April 2010 and consider enhanced capital allowances for ultra-low carbon commercial vehicles.
Paul Everitt, SMMT chief executive, said: "The Pre-Budget Report provides an important opportunity to sustain the recovery and support the longer-term competitiveness of the UK motor industry.
"It is essential that existing support schemes begin to deliver more quickly and help to encourage investment in R&D, skills and productivity. Measures that help to signal a long-term commitment to manufacturing and help to stimulate key parts of the market will boost business confidence and the attractiveness of the UK to inward investors."