Call for Budget to support car industry

What will this year’s Budget, due out on Wednesday do for the motorist, the industry and its 800,000 plus workforce?Following months of falling sales, production cutbacks and continued economic pressures, the UK motor industry is reaching a critical stage - Budget 2009 may prove a decisive moment for the automotive sector.The motor industry has called for government support, urging the chancellor to seize the opportunity to send strong ‘buy-now’ signals to kick-start demand in the new vehicle market by introducing a UK scrappage incentive scheme.In addition, the Society of Motor Manufacturers and Traders (SMMT)  is calling for wider tax reviews aimed at increasing sales across the car and commercial vehicle markets. They are:• Removing or delaying the planned 2010/2011 introduction of a first year rate of tax on new cars.• Increasing the Annual Investment Allowance for businesses to £500,000 to boost spending on vans, trucks, construction equipment, buses and coaches.• Enhancing the Reduced Pollution Certificate discount for trucks, buses and coaches to incentivise the purchase of Euro 5 vehicles through reduced VED rates.• 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.• Encouraging enhanced vehicle replacement in government departments and agencies in 2009 and 2010.

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