The FPB is warning that additional transport taxes will overshadow ‘green' incentives, which were announced in the 2008 Budget to encourage smaller businesses to use more fuel-efficient company cars.
VAT on fuel went up by 2p in October 2007, and the Chancellor of the Exchequer, Alistair Darling MP, was expected to schedule another 2p rise in April. This has been delayed, but only until October 2008. The Chancellor also revealed in the Budget that he would be inviting tenders for new road pricing technologies. In addition, the Government is continuing to provide funding for local ‘congestion' charges, which will affect many smaller hauliers, and other businesses which rely on freight transport for supplies and deliveries.
"The possibility of road pricing, combined with an increase in fuel duty, has left smaller businesses genuinely worried that they will struggle to control costs," said the FPB's Chief Executive, Phil Orford. "Many of our members are concerned that delivery and supply costs will rise sharply. Given the evidence that other input costs are also on the rise, many will have no option but to increase their prices in order to remain profitable."
The capital allowance for business owners who purchase new cars with low CO2 emissions, which allows them to write off 100 % of the purchase price of the vehicle, is being extended to five years.
However, Tracy Hoather, who runs the Knutsford-based haulage firm Sameday plc, believes that the cumulative tax burden will dwarf the Government's environmental incentives.
"The fuel duty escalator is separate from VAT, so businesses can't claim it back. It is a definite penalty for haulage firms – fuel duty really should be linked to the price of a litre of diesel or petrol," she said. "When it was put in place, I don't think anyone believed that the fuel duty escalator would raise as much money as it has."
She added: "Now, green taxes have become trendy, and favoured by most politicians. Congestion charging really concerns me. I can see every city having a separate scheme. That would be a nightmare for a company like ours, which delivers all over the country."
