Chancellor George Osborne yesterday opted to freeze Company Car Tax for all cars below 95g/km in 2013-14 and increase the tax by 1% for all cars above this mark.
Gary Killeen, UK commercial director at GE Fleet Services, said: "This is an expected target in line with ongoing Company Car Tax changes. But it is worth pointing out fewer than 1% of available cars currently fall into the sub-95 g/km category, which gives some idea of the challenge that it represents. Certainly, manufacturers will have their work cut out in providing a wider range of models suitable for fleet use that reach this figure.
"We were also disappointed to see that no clarification has been provided on Company Car Tax rates beyond the 2013-14 tax year. This means fleets and drivers are today buying 'blind' in taxation terms - they have no idea of the tax demands that will be made on them in 2014-15 and 2015-16."
Commenting on the Government's decision to reduce fuel tax by 1p, Killeen added: "The reduction in fuel duty is welcomed and not to be dismissed, but is likely to be quickly swallowed up in future fuel price rises.
"The increase in tax payable on free fuel for company cars has risen from £18,000 to £18,800 and this rise is well below the increase in petrol and diesel prices seen in the past few months in percentage terms, meaning that it will effectively represent a net reduction in most free fuel bills. Governments have been discouraging free fuel provision for years, so is this a change in policy?"
