Organisations within the automotive industry have responded to the Budget 2014 statement.
Tim Lwin, tax partner at motor retail specialist firm ASE said: “For dealers, accelerated relief on capital expenditure and reduced operating costs should improve bottom line profitability, and the measures introduced to increase personal net income will impact disposable income and boost consumer confidence to fuel more car buying, servicing and repair”.
For dealers required to undergo showroom refurbishment, the increase in the annual investment allowance to £500k will allow them to obtain immediate tax relief on the majority of their qualifying capital expenditure.
Lwin said: “In our experience the typical manufacturer-led CI refurbishment costs in excess of £250k, and these changes will directly improve a dealers cash flow."
For dealers operating within Enterprise Zones the full cost of any qualifying expenditure will be fully deductible and the business will also benefit from reduced business rates.
Extending the Apprenticeship Grants for Employers Scheme with an extra £85m over the next two years and the £2,000 NIC employer allowance which comes into effect from 6 April 2014 will support dealers to reduce the cost of employment and expansion plans.
The raft of measures introduced to increase net income i.e. the increase to the personal allowances level, the increased threshold for 40% tax rate payers, beneficial changes for pensioners and even the scrapping of fuel duty in September; will all impact disposable income and boost consumer confidence to fuel car buying, servicing and repair, Lwin added.
SMMT chief cxecutive Mike Hawes said the Chancellor’s focus on investment, exports and skills, as well as reducing energy costs for manufacturing, is welcomed by the automotive industry.
Extending and doubling the Annual Investment Allowance and improving export finance are important signals to encourage the UK’s manufacturing base, helping trigger greater business investment and enhancing UK export capability, he said.
"In line with welcome reductions in energy costs, we ask government to look at business rates to ensure the system works for manufacturing and maintain our global competitiveness.
“We welcome measures to extend incentives for ultra-low emission vehicles (ULEVs) under the company car tax regime.
"Industry needs clear direction from government on how its £500m commitment to develop the ultra-low carbon vehicle sector between 2015-2020 will be allocated," Hawes added.
Chris Sutton, managing director of motor finance brand Black Horse, said rising fuel costs remain a significant burden for British motorists and although the pledge to freeze the fuel duty rise was a step in the right direction, motorists across the UK would have liked to have seen the Chancellor go further and announce a cut in fuel duty.
"Reducing this burden would have offered motorists an extra boost to their spending power and provided a vital fillip to the motor industry just as it begins to show strong sales on the back of improving consumer confidence," he added.
NFDA director Sue Robinson said the budget was built as one that supports businesses and investment. "We are pleased to see that the annual investment allowance was increased and extended to help businesses invest, however we feel they could have gone further and extended the allowance beyond 2015.
"It was announced that the government is building on the success of the Apprenticeship Grants for Employers (AGE) scheme, by providing an extra £85 million in both 2014-15 and 2015-16 for over 100,000 grants to employers. Also announced was £20m for post graduate apprentice training. This will be a positive initiative for the retail motor sector.
"For consumers, measures such as reducing duties on beer and freezing fuel duty in addition to increasing income tax personal allowances will give consumers more disposable income to spend on discretionary good such as cars."
Click here for AM's report from Budget 2014.