HCUK-mid-year-review

Fleet Insider:
FY16/17 Mid-year Review
The policies that matter to
Fleet Managers
Hitachi Capital (UK) PLC
Vehicle Solutions

The information, materials and opinions contained in this
report are for general information purposes only. They
are not intended to constitute legal or other professional
advice, and should not be relied on or treated as a
substitute for specific advice relevant to particular
circumstances.
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in this paper are those of Hitachi Capital Vehicle
Solutions. Whilst every effort has been made to ensure
the accuracy of the information within this document,
it is offered as guidance only. Hitachi Capital (UK) PLC
does not accept any responsibility for any loss which
may arise from reliance on information or materials in this
document.
Hitachi Capital Vehicle Solutions is a division of Hitachi
Capital (UK) PLC. Registered in Cardiff no. 1630491.
Registered Office:
Hitachi Capital House, Thorpe Road, Staines-upon-
Thames, Surrey TW18 3HP. Hitachi Capital (UK) PLC
is authorised and regulated by the Financial Conduct
Authority for Consumer Credit activity.

2
www.hitachicapitalvehiclesolutions.co.uk
CONTENTS
Introduction Page 3
1. The Market 5
1.1. Economic outlook 5
1.2. Registrations of new cars 6
1.3. Registrations of commercial vehicles 6
1.4. Residual values 7
2. Budget 2016 8
2.1. Fuel duty 9
2.2. Company car tax 10
2.3. Salary sacrifice 11
2.4. Infrastructure 11
2.5. Other policies for motorists 11
3. Other Tax and Finance Policies 12
3.1. Benefit-In-Kind rates and increases 13
3.2. New Vehicle Excise Duty system 14
3.3. Increase to Insurance Premium Tax 14
3.4. Lease accountancy changes 15
3.5. Capital allowances 15
3.6. Approved Mileage Allowance Payment rates 15
4. Infrastructure 16
4.1. Government investment 17
4.2. The infrastructure pipeline 17
4.3. Rail 18
4.4. Airports 19
4.5. Roads 19
5. Environmental 20
5.1. Carbon dioxide emissions 20
5.2. Euro 6 emission standards 21
5.3. Grants for ultra-low emission vehicles 22
5.4. Registrations of ultra-low emission vehicles 22
5.5. London 23
5.6. Go Ultra Low cities 23
6. Technology 24
6.1. Alternatively-fuelled vehicles 25
6.2. Scalable car manufacture technology 26
6.3. Autonomous vehicles 26
6.4. Smart tachographs 27
7. Safety 27
7.1. Road casualties 29
7.2. International comparison 29
7.3. The causes of accidents 29
7.4. New road safety measures 30
7.5. eCall 30
7.6. Emergency braking and lane departure warning systems 30
List of Tables 31
Sources and Further Reading 32
Glossary & Acronyms 33

Fleet Insider: FY16/17 Mid-year Review
3
These are uncertain times for motorists. Some of the uncertainty is economic:
how will Brexit affect our markets? Some of the uncertainty is political: what will
the policies of Theresa May’s Government look like? And some of the uncertainty
is actually quite exciting: will we all be gliding around in cars designed by Apple
and Google in several years’ time?
Which is why we at Hitachi Capital Vehicle Solutions have put together this Mid-year
Review (for the financial year 2016/17). It is our guide for fleet managers and fleet
drivers providing you with the most valuable commodity of all: information. Its seven
sections include the most recent tax changes for company cars, an overview of the
nation’s infrastructure plans, and summaries of the newest technologies in motoring.
And there’s much more. We want this document to be a reliable point of reference in
a constantly changing environment.
But, of course, this Review is subject to uncertainty itself. It cannot account for any
new policies that might be introduced. It cannot predict the ebbs and flows of oil
supplies and fuel costs. To get around this, we shall be publishing quarterly updates
– with all the latest figures and developments. For even more up-to-the-minute
analysis, there is our Expert Blog at www.hitachicapitalvehiclesolutions.co.uk/blog
In the meantime, we hope that our Mid-year Review is useful and even enjoyable
for you. If you want to know how much money has been earmarked for road
improvements, or how the new system of Vehicle Excise Duty will operate, then this
is the document for you. Even if you don’t, we are confident that there is something
for you within these pages.
Please get in touch if you have any views on this Review or are interested in finding
out more about our services.
Jonathan Southall
Marketing Business Partner
Jonathan.southall@hitachicapital.co.uk
www.hitachicapitalvehicle solutions.co.uk
Introduction

1. The Market
Economic forecasts down,
but the new car market is
still growing strongly.
4

5
1.1. Economic outlook
• The Government’s forecasting
body, the Office for Budget
Responsibility (OBR), updated
its growth forecasts for George
Osborne’s last Budget in
March. As the above chart
shows, these forecasts have all
been downgraded from those
provided for last year’s Autumn
Statement. The economy is now
expected to grow by 2.0 per
cent, rather than by 2.4 per cent,
this year. Growth in subsequent
years is expected to hover
around the 2.0 per cent mark.
• These downgraded forecasts
reflect some of the problems
afflicting the global economy,
from the Chinese slowdown to
the diminished price of oil. But
they also reflect problems with
the UK economy. The OBR
highlighted the productivity of
the country’s workforce. As
they put it, ‘The most significant
forecast change we have made
since November has been to
revise down potential productivity
growth … This in turn has
prompted us to revise down our
GDP growth forecasts by around
0.3 percentage points a year to
an average of 2.1 per cent a year
over the rest of the decade.’
• These forecasts could be revised
significantly for the forthcoming
Autumn Statement, in view of
the UK’s recent vote to leave the
European Union.
• In the documentation it published
alongside the Budget, the OBR
summarised what others are
predicting for the UK’s economy
in the event of ‘Brexit’. These
predictions vary wildly. One study
suggests that ‘incomes could fall
by close to 10 per cent’. Another
‘argues that leaving the EU could
increase UK GDP by 13 per
cent’.
See Section 2 for more information
about Budget 2016.
1. The Market
These forecasts could
be revised significantly
in view of the recent
vote to leave the EU.
Table One: GDP growth
GDP growth forecasts
Source: Office for Budget Responsibility

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1.2. Registrations of new cars
• Concerns about the wider
economy haven’t yet spread to
the UK’s car market. According
to figures from the Society
of Motor Manufacturers and
Traders (SMMT), shown in the
chart above, a total of 2,677,250
new cars were registered in the
year to June 2016 – 4.3 per cent
more than in the previous 12
months.
• This growth has been boosted
by UK fleets. The number of new
car registrations belonging to
fleets was 1,349,826 in the year
to June, a 7.3 per cent increase
on the previous 12 months. The
number of private registrations
also increased by 2.4 per cent.
• And growth also occurred across
all fuel types. The number of
petrol cars registered in the year
to June was 5.5 per cent higher
than in the previous 12 months.
The number of diesel cars
was 2.3 per cent higher, whilst
alternatively-fuelled vehicles
(AFVs) recorded a 22 per cent
increase.
• AFVs accounted for 3.0 per cent
of all new car registrations in
the past year, their highest ever
market share for a 12-month
period.
See Section 6 for more information
about AFVs.
1.3. Registrations
of commercial vehicles
• The commercial vehicle market
is also buoyant. Again according
to the SMMT’s figures, 377,392
new vans were registered in the
year to June 2016, 7.0 per cent
more than in the previous 12
months. This is a record high.
• Registrations of trucks rose to
53,654 in the year to March
2016 – a 20 per cent increase on
the previous 12 months.
• Will this pace of growth be
sustained? The SMMT’s Chief
Executive strikes a cautious
tone, saying that ‘Maintaining
economic certainty for van
operators will be key to the
sector’s ongoing success.’
Growth in new car registrations has been boosted
by UK fleets.
Table Two: New car registrations: rolling annual total
New car registrations: rolling annual total
Source: The Society of Motor Manufacturers and Traders

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1.4. Residual values
• The record numbers of new vehicle
registrations could mean that residual
values (RVs) decline, or at least
struggle to grow, this year. In January,
CAP Automotive warned that ‘there
will be more pressure on used prices
during 2016 than there has been over
the last 12 months.’
• The extent of this downwards
pressure will depend on such factors
as the number of pre-registrations in
2015, and how quickly cars are put
into the second-hand market now.
• It could also depend on government
policy. CAP have also warned that,
should the Government introduce
legislation to combat air pollutants, the
RVs of diesel vehicles might go down.
Record numbers of new vehicle
registrations could mean that residual
values decline, or at least struggle to grow.
Table Three: Commercial vehicle registrations
Commercial vehicle registrations

2. Budget 2016
Fuel duty frozen.
New infrastructure projects.
Uncertainty over Company
Car Tax.
8

9
2.1. Fuel duty
• One of the biggest and most
pleasing surprises of the Budget
was George Osborne’s decision
not to increase the rate of fuel
duty. It had been expected that
he would. With fuel prices at
their lowest since 2009 – as
shown in the graph above – the
Chancellor had the opportunity
to recoup some of the £billions
in tax revenue that he lost by
freezing fuel duty throughout the
last Parliament.
• Instead, Osborne continued
the freeze. So long as the new
Chancellor, Philip Hammond,
doesn’t change the policy, the
main rate of fuel duty will be
kept at 57.95 pence a litre for
2016-17. According to the
Budget itself, ‘the average driver
will save around £75 every year
in duty compared to pre-2010
fuel duty escalator plans.
• As for what will happen after
2016-17, little can be said at
the moment. Osborne was a
Chancellor who made it one of
his priorities to contain the rate
of fuel duty. It remains to be
seen whether Hammond will do
likewise.
2. Budget 2016
The freeze in fuel
duty will save the
average driver £75
a year compared to
pre-2010 plans.
Table Four: Weekly road fuel prices, pence per litre
Weekly road fuel prices, pence per litre
Source: Department of Energy & Climate Change

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2.2. Company car tax
• Osborne did not reveal the
Benefit-In-Kind (BIK) rates
for 2020-21. This means that
we only have the rates going
forward until 2019-20 that were
announced in Budget 2015.
These are based on carbon
dioxide (CO2) emissions.
Section 3 of this document
contains information about
what those rates are.
• The former Chancellor did,
however, announce that he
intended to keep basing BIK
rates on CO2 emissions from
2020-21 onwards. This was
something of a surprise, given
the greater environmental
and legal emphasis that has
been placed on emissions of a
different sort: the nitrogen oxides
(NOx) that are a by-product of
diesel engines in particular. It
had been speculated that this
Budget would move to rate
vehicles according to their NOx
emissions.
• Osborne also announced a
review of BIK rates for ultra-low
emission vehicles (those emitting
less than 75 grams of CO2 per
kilometre) in order to ‘refocus
incentives on the cleanest cars’.
• The 100 per cent First Year
Allowance (FYA) for businesses
purchasing low emission cars
will be extended by three years
until April 2021. From 2018, the
CO2 thresholds for FYA and for
capital allowances for business
cars will be reduced.
• Support for zero-emission vans
will be extended, meaning that
their van benefit charge will be
20 per cent of the main rate in
2016-17 and 2017-18. It will
then increase on a tapered basis
to April 2022.
Osborne announced
a review of BIK rates
for ultra-low emission
vehicles.

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2.3. Salary sacrifice
• Last November’s Autumn
Statement made it clear that
the Treasury is looking at salary
sacrifice schemes. This year’s
Budget added a small amount
of detail. It confirmed that the
Government is ‘considering limiting
the range of benefits that attract
income tax and NICs advantages
when they are provided as part
of salary sacrifice schemes.’
However, these limitations are
unlikely to affect ‘pension saving,
childcare and health-related
benefits such as Cycle to Work’.
• Cars provided through salary
sacrifice do not appear on this list
of exceptions, so they could be
subject to limitations in future. On
10 August 2016, HMRC released
a consultation on the potential
removal of Income Tax and NIC
benefits for most BIKs, including
vehicles, which are provided via
a salary sacrifice scheme. The
closing date for submissions is
19 October 2016.
• It’s worth noting that cars may
not be one of the primary targets.
After all, they are not tax exempt in
the way that other salary sacrifice
schemes are. The Exchequer loses
out on the National Insurance and
income tax that the employee
would have paid, but it still gains
from the BIK tax and employers’
National Insurance that are then
imposed on the vehicle.
• In any case, car salary sacrifice
schemes have many benefits.
They enable people to buy cleaner,
more efficient cars at better prices,
whilst they enable companies to
attract and retain the best talent.
2.4. Infrastructure
• There were numerous
infrastructure announcements
in the Budget, many of which
sounded big. It allocated money
to projects such as a high-speed
railway line (HS3) between Leeds
and Manchester, a Trans-Pennine
tunnel between Sheffield and
Manchester, and a second
Crossrail line across London.
• However, the sums of money
weren’t large by the usual
standards of public spending – as
they were mostly for the purposes
of planning, rather than building.
For instance, £80 million was
provided to ‘allow Crossrail 2 to
proceed to the next stage with
the aim of depositing a Hybrid Bill
within this Parliament’.
• The Government is also ‘launching
the process’ for its second Road
Investment Strategy for between
2020-21 and 2024-25. The first
Road Investment Strategy saw
about £15 billion committed to
renovating the country’s road
network.
• This isn’t to dismiss the Budget’s
infrastructure policies. These
preparatory stages are necessary
for large projects, and the
Government is revealing the scale
of its ambitions by committing to
them. They have also spent many
£billions on infrastructure in other
Budgets. Please see Section 4 for
more information about this other
spending.
• Besides, some money was
allocated to construction work.
£130 million was provided to
repair roads and bridges that were
damaged in recent storms, among
other measures.
2.5. Other policies for motorists
• The establishment of a £15 million
‘connected corridor’ between
London and Dover, so that vehicles
can communicate wirelessly with
the infrastructure around them.
• Trials of driverless cars on the
strategic road network by 2017.
• Trials of convoys of driverless
trucks.
• Trials of motorway signs that
compare fuel prices along the
route.
• See Section 6 for more information
about autonomous vehicles.

3. Other tax and
finance policies
12
Benefit-In-Kind, Vehicle Excise
Duty, Approved Mileage Allowance
Payments and more.

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3. Other tax and finance policies
3.1. Benefit-In-Kind rates
and increases
• All company cars pay BIK tax,
commonly known as ‘company
car tax’ (CCT), according to
their CO2 emissions. The latest
Budget didn’t reveal the bands
for 2020-21, so we only know
them for the four years up to
and including 2019-20. These
are shown in the table above.
• Even the cleanest vehicles are
subject to CCT. Any vehicle
emitting up to 50 grams of
carbon dioxide per kilometre
(gCO2/km) – including pure
electric, zero-emission models
– faces a levy of 7 per cent in
the current financial year. By
2019-20 this will have risen to
16 per cent. For cars emitting
between 51 and 75 gCO2/km,
the current rate is 11 per cent,
rising to 19 per cent in 2019-20.
• For the next three financial years
– i.e. from 2016-17 to 2018-
19, inclusive – cars emitting
more than 75 gCO2/km will see
their CCT rise by 2 percentage
points a year, to a maximum of
37 per cent. For the first two
of these years there will be a
4-percentage point differential
between both the 0-50 and 51-
75 gCO2/km bands and the 51-
75 and 76-94 gCO2/km bands.
From 2018-19, this differential
will drop to 3 percentage points.
• In 2019-20, cars emitting more
than 75 gCO2/km will see
their CCT rise by 3 percentage
points, to a maximum of 37
per cent.
• In his final Budget, as discussed
in Section 2 of this document,
George Osborne promised to
review the CCT rates for vehicles
emitting less than 75 gCO2/km,
in order to ‘refocus incentives on
the cleanest cars’. This has led
to speculation that, from 2020-
21 onwards, these vehicles
could be exempted from CCT.
• There is also a 3-percentage
point surcharge for diesel
vehicles, such that a diesel car
emitting, say, 109 gCO2/km
occupies a 21 (i.e. 18 + 3) per
cent band in the current financial
year. This surcharge was going
to be abolished in April, but the
last Autumn Statement revealed
that it would be retained for
another five years. Given this, as
well as the general direction of
CCT policy, alternatively-fuelled
vehicles – or just the new breed
of cleaner petrol-engine cars –
may become more attractive to
fleet managers.
Table Five: Benefit-in-kind (BIK) rates, 2016-17 to 2019-20
NB: A surcharge of 3 percentage points applies to diesel vehicles. A diesel car emitting, say, 109 gCO2
/km would face a tax rate of 18 + 3 = 21 per cent in 2016-17.
Source: HM Revenue & Customs
Benefit-in-kind (BIK) rates, 2016-17 to 2019-20
Appropriate percentage 2016-17 2017-18 2018-19 2019-20
7 0 – 50 gCO2
/km – – –
9 – 0 – 50 gCO2
/km – –
11 51 – 75 – – –
13 – 51 – 75 0 – 50 gCO2
/km –
15 76 – 94 – – –
16 95 – 99 – 51 – 75 0 – 50 gCO2
/km
17 100 – 104 76 – 94 – –
18 105 – 109 95 – 99 – –
19 110 – 114 100 – 104 76 – 94 51 – 75
20 114 – 119 105 – 109 95 – 99 –
21 120 – 124 110 – 114 100 – 104 –
22 125 – 129 114 – 119 105 – 109 76 – 94
23 130 – 134 120 – 124 110 – 114 95 – 99
24 135 – 139 125 – 129 114 – 119 100 – 104
25 140 – 144 130 – 134 120 – 124 105 – 109
26 145 – 149 135 – 139 125 – 129 110 – 114
27 150 – 154 140 – 144 130 – 134 114 – 119
28 155 – 159 145 – 149 135 – 139 120 – 124
29 160 – 164 150 – 154 140 – 144 125 – 129
30 165 – 169 155 – 159 145 – 149 130 – 134
31 170 – 174 160 – 164 150 – 154 135 – 139
32 175 – 179 165 – 169 155 – 159 140 – 144
33 180 – 184 170 – 174 160 – 164 145 – 149
34 185 – 189 175 – 179 165 – 169 150 – 154
35 190 – 194 180 – 184 170 – 174 155 – 159
36 195 – 199 185 – 189 175 – 179 160 – 164
37 200+ 190+ 180+ 165+

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3.2. New Vehicle Excise
Duty system
• A new system of Vehicle Excise
Duty (VED) will be introduced in
April 2017. Its bands, announced
in last year’s Budget, are shown
in the table above.
• In their first year of registration,
cars will be taxed according
to their CO2 emissions, to a
maximum of £2,000 for those
emitting over 255 gCO2/km. In
subsequent years, a standard
annual rate of £140 applies.
Only zero-emission cars will be
exempted from any payments.
• A £310 supplement will be
imposed on cars with a list price
of over £40,000. This applies for
the first five years in which the
standard rate is paid. And so,
a car costing over £40,000 will
attract a levy of £450 (£140 +
£310) in its second year and in
every year until that period is over.
The payment will then revert to
£140.
• This new system will be more
expensive for most motorists.
The existing system is also
based on CO2 emissions, but
its bands were introduced in
2001, when cars were less clean,
and is therefore more lenient.
For example, a car emitting 120
gCO2/km currently attracts just
£30 a year in VED.
• The new system will only apply to
vehicles registered on or after 1st
April 2017. Any registered before
that date will be taxed according
to the existing system. There
could be a rush of people buying
low emission vehicles ahead
of the change to capitalise on
current arrangements.
• There could be other costs under
the new system. For instance,
the £310 supplement is likely
to cause administration issues
for remarketing, as buyers will
need to know the original price
of the vehicle for tax purposes.
We hope the DVLA will find a
way to reduce any potential
administrative burdens.
3.3. Increase to Insurance
Premium Tax
• The standard rate of Insurance
Premium Tax (IPT) was increased
from 6 per cent to 9.5 per cent
last November. The Budget in
March increased it again, from
9.5 per cent to 10 per cent. This
new rate will come into effect on
1st October.
• IPT is a tax on insurers, but it is
often passed on to consumers in
the form of higher premiums. The
Association of British Insurers
estimated that last November’s
increase will add nearly £13 to
the average comprehensive
motor insurance policy.
• It’s not just standard vehicle
insurance that will be affected.
Some breakdown services
are offered as insurance
products, and may also become
more expensive. All of this
will influence the Whole Life
Cost considerations that fleet
managers have to make.
Table Six: Vehicle excise duty (VED) bands, April 2017 onwards
Emissions (gCO2
/km) First year rate Standard Year rate
0 £0 £0
1 – 50 £10 £140
51 – 75 £25 £140
76 – 90 £100 £140
91 – 100 £120 £140
101 – 110 £140 £140
111 – 130 £160 £140
131 – 150 £200 £140
151 – 170 £500 £140
171 – 190 £800 £140
191 – 225 £1,200 £140
226 – 255 £1,700 £140
255+ £2,000 £140
Vehicle excise duty (VED) bands, April 2017 onwards
NB:Cars with a list price higher than £40,000 pay a £310 supplement for five years.

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3.4. Lease accountancy
changes
• In January, the International
Accounting Standard Board (IASB)
published a new International
Financial Reporting Standard (IFRS
16). This new standard will be
effective from 1st January 2019.
• It will only apply to organisations
signed up to International
Financial Reporting Standards.
This discounts most UK firms, as
they report to the UK’s Generally
Accepted Accounting Principles
(GAAP).
• The firms that are affected will be
affected quite significantly. IFRS
16 replaces the current ‘risks and
rewards’ model with a ‘right of
use’ model. In effect, this means
that almost all leases will have to
be recognised on lessees’ balance
sheets.
• Exceptions include short-term
leases (generally less than 12
months) and those of low value
assets (according to IASB
guidance, these will typically cost
less than $5,000 when new). In
addition, informal lease extensions
and ancillary leasing services, such
as maintenance, will not need to
be reported on balance sheet.
3.5. Capital allowances
• Between 1st April 2015 and 31st
March 2018 a 100 per cent first
year capital allowance (FYA) is
available for business cars with
emissions of 75 gCO2/km or
lower. This means that, in the first
year of ownership, companies can
offset the full cost of qualifying
cars against their profits, for the
purpose of calculating tax.
• The most recent Budget extended
this FYA for another three years,
until April 2021. The emissions
threshold will be reduced to 50
gCO2/km in April 2018.
• The CO2 threshold for the lease
rental restriction is linked to the
threshold for capital allowances
for business cars, so the rate will
be reduced to 110g CO2/km from
April 2018 to March 2021. This
restriction will apply to expenses
incurred on hiring a car above this
CO2 emission threshold on or after
1 April 2018 for corporation tax
and 6 April 2018 for income tax.
• Alongside other changes to the tax
system, particularly BIK rates, this
could encourage companies to
choose low emission vehicles.
3.6. Approved Mileage
Allowance Payment rates
• Employers can make payments
to employees who use their own
vehicles for business, to help cover
such expenses as fuel costs. So
long as these payments fall within
allowed rates, determined by
HMRC, then they do not count as
a taxable benefit. Any excess is a
taxable benefit.
• The Approved Mileage Allowance
Payment (AMAP) rates for 2016-
17 are shown in the table above.
For tax purposes, the 45p rate for
cars and vans drops to 25p after
the first 10,000 business miles.
However, for National Insurance
purposes, it remains at 45p for all
business miles.
• HMRC provides the following
example: ‘Your employee travels
12,000 business miles in their car -
the approved amount for the year
would be £5,000 (10,000 x 45p
plus 2,000 x 25p).’ Anything over
that £5,000 would be taxable.
• Employees may be able to claim
Mileage Allowance Relief (MAR) if
their employer pays them below
the approved amount.
Table Seven: Approved Mileage Allowance Payments (AMAPs), 2016-17
Type of vehicle First 10,000 miles Above 10,000 miles
Car or van 45p 25p
Motorcycle 24p 24p
Bicycle 20p 20p
Approved Mileage Allowance Payments (AMAPs), 2016-17

4. Infrastructure
The Government’s transport
projects from now until
2020 – and beyond.
16

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4.1. Government investment
• Initially, George Osborne stuck
to his Labour predecessor’s
plans to cut government
investment by 60 per cent
between 2010 and 2015. But,
faced with weak economic
growth, the Treasury steadily
increased its investment
plans, as shown in the graph
above. In 2013, it committed
to £100 billion worth of public
infrastructure projects between
2015 and 2020.
4.2. The infrastructure pipeline
• Together, the public and
private sectors invested £245
billion in Britain’s infrastructure
between 2010 and 2015. There
is another £483 billion worth
of investment in the pipeline –
£297 billion of which is planned
for the next five years.
• According to the Government’s
new National Infrastructure
Delivery Plan, there are 602
economic infrastructure projects
and programmes currently in
the pipeline. 300 are scheduled
to be completed by 2021.
• As shown in the graph above,
the largest direct beneficiary
of this spending is the energy
sector, with projects in the
pipeline totalling £256 billion,
£117 billion of which is due to
be spent in the next five years.
This includes plans for three
new nuclear power stations:
Hinkley Point C in Somerset,
Moorside in Cumbria and Wylfa
B in Anglesey. Funded by £46
billion of private investment,
these three power stations
are expected to come online
between 2026 and 2028,
and generate a combined 10
gigawatts of electricity.
• The next largest sector for
investment is transport: there
are currently 329 transport
projects in the infrastructure
pipeline, totalling £134 billion.
Spending on these projects
between 2016 and 2021 is
expected to be £88 billion.
4. Infrastructure
There is £483 billion
of investment in the
pipeline – £297 billion
of which is planned for
the next five years.
Table Eight: Public sector net investment, constant 2014-15 pricesSource: HM Treasury and OBR
March 2010 Budget plans Actual March 2016 Budget plans
Public sector net investment, constant 2014-15 prices

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4.3. Rail
• The country’s single largest
infrastructure project is the
new High Speed 2 railway
from London to Manchester
and Leeds. This will be funded
by £54 billion of government
investment, with work due to
commence next year. Phase
One – London to Birmingham
and the West Midlands – is due
to be operational by 2026, while
Phase Two – from the West
Midlands to Manchester and
Leeds – is due to be completed
by 2032.
• In this year’s Budget, George
Osborne gave the go-ahead
for High Speed 3, which will
connect Leeds and Manchester,
reducing journey times between
the two cities by 30 minutes.
Plans for this route are due to
be published next year, though
no capital funding has been
committed to it yet.
• £3.7 billion will be spent
completing the Crossrail line
across London. When services
start on the first section of the
line in December 2018, it will be
renamed the ‘Elizabeth Line’.
The full route, from Reading in
Berkshire to Shenfield in Essex,
is due to be operational from
the end of 2019.
• A further £34 billion is due to be
spent on other rail infrastructure
projects, mainly aimed at
increasing capacity on existing
routes and electrifying more of
the network.
Table Nine: Spring 2016 National Infrastructure Pipeline, constant 2014-15 prices
Source: Infrastructure and Projects Authority
Spring 2016 National Infrastructure Pipeline, constant 2014-15 prices
£0bn
£50bn
£100bn
£150bn
£200bn
£250bn
£300bn

19
4.4. Airports
• There is also £5 billion going
into improving and expanding
airports from Bristol to
Edinburgh. The Government
has, however, postponed
its long-awaited decision on
whether to add a new runway
at Heathrow or Gatwick until
October at the earliest.
4.5. Roads
• In 2013, the then Chief
Secretary to the Treasury,
Danny Alexander, announced
plans for ‘the greatest
investment in our roads since
the 1970s’. The government’s
Road Investment Strategy,
launched in December 2014,
set out how it would spend
£15 billion improving England’s
roads between 2015 and
2021. The main aims of this
investment are to reduce the
number of deaths and injuries
on the roads, minimise delays,
improve the condition of roads
with a resurfacing programme,
and mitigate their environmental
impact.
• Highways England is also
turning more sections
of motorway into ‘Smart
Motorways’, on which variable
speed limits and hard shoulder
running are used to improve
traffic flow. This will include new
sections of the M1, the M3,
the M4 and the M6, as well as
on the M60 and M62 around
Manchester.
• At March’s Budget, the
Government launched the
process for developing the
Second Road Investment
Strategy, which will cover the
period from 2020-21 to
2024-25.
• The government is also
providing £6.1 billion to local
authorities in England for road
maintenance and improvements
over the period 2015-16 to
2020-21. This is allocated
through four schemes: £4.7
billion through the Highways
Maintenance Funding formula,
£575 million through a
challenge fund, £578 million
through an incentive fund,
and £250 million through the
Pothole Action Fund.
In 2013 the
Government
announced plans
for ‘the greatest
investment in our
roads since the
1970s.’

5. Environmental
A 28.3% reduction in
new car carbon dioxide
emissions since 2005.
20

21
5.1. Carbon dioxide emissions
• New cars sold in the UK in
2015 emitted an average
of 121.4 gCO2/km. That
represents a 2.6 per cent
reduction since 2014 and a
28.3 per cent reduction since
2005. It also means that the
UK has met the EU-wide target
for 2015 of 130 gCO2/km or
less. However, a further 21.7
per cent reduction – 4 per cent
a year – would be needed to
reach the EU target for 2021 of
95 gCO2/km.
• For vans, the EU-wide targets
are for newly registered
vehicles to emit an average of
175 gCO2/km or less by 2017
and 147 gCO2/km or less by
2020.
5.2. Euro 6 emission
standards
• The new Euro 6 emission
standards came into force
for new cars and light vans
(weighing 1,305kg or less)
registered from September
2015 onwards. The NOx limit
for diesels has been tightened
significantly: from 0.18g/km
under Euro 5 to 0.08g/km now.
Euro 6 standards for larger
vans (up to 3,500kg) – also
with 55 per cent reductions in
NOx limits – will apply for new
registrations from September
2016.
• In February 2016, the
European Union agreed on the
introduction of new ‘real driving
emission’ tests, to account for
the fact that NOx emissions
can be significantly higher on
the road than in the laboratory.
• When these tests come into
force – September 2017 for
new models, and September
2019 for all new vehicles –
manufacturers will be given
some leeway initially.
A ‘conformity factor’ of 2.1 will
apply to the Euro 6 NOx limit
for the first two years, meaning
that emissions can exceed the
limit by up to 110 per cent. The
actual NOx limit for this period
will therefore be 0.168g/km.
• The EU is currently devising
its Euro 7 standards. These
should be introduced before
2021.
5. Environmental
Table Ten: Average new car CO2
emissions, gCO2
/km
0
20
40
60
80
100
120
140
160
180
200
1997 1998 2011 2012 2013 2014 201520102006 2007 2008 2009200520042002 2003200120001999
Average new car CO2
emissions, gCO2
/km

22
5.3. Grants for ultra-low
emission vehicles
• In 2011, the Government
launched a ‘plug-in car grant’
to incentivise take-up of
ultra-low emission vehicles
(ULEVs). Originally, this offered
purchasers up to £5,000 off
the cost of buying an ultra-
low emission car. However, in
March 2016, the Government
reduced the grant and
introduced different levels for
three different categories of
ULEV, dependent on their CO2
emissions and their zero-
emission range. These new
levels are shown in the table
above.
• The future of the plug-
in car grant is uncertain.
The Government has only
committed to maintaining it
at current levels until March
2017, or until a total of 40,000
category 1 cars and 45,000
category 2 or 3 cars have been
sold – whichever comes first.
• There is also a ‘plug-in van
grant’, offering 20 per cent of
the cost of a van with CO2
emissions of less than 75 g/km
and a zero-emission range of at
least 10 miles, up to £8,000.
• In March, the Government
reduced the maximum grant
available through its ‘Electric
Vehicle Homecharge Scheme’
– which offers ULEV owners 75
per cent of the cost of buying
and installing a chargepoint at
home – from £700 to £500.
5.4. Registrations of ultra-low
emission vehicles
• From the launch of the grant
in January 2011 to the end of
June 2016, 66,296 new eligible
ULEVs have been registered
in the UK. The rate of new
registrations has increased
rapidly, from 1,056 in 2011 to
32,823 in the last 12 months.
ULEVs accounted for 1.4 per
cent of all new registrations in
the first half of 2016.
• The Government now lists 27
different models of car eligible
for the plug-in car grant, as well
as three more that are ultra-
low emission but ineligible as
they cost more than £60,000.
Nine models of grant-eligible
ultra-low emission van are also
available.
Registrations of new ultra-low emission
vehicles have increased from 1,056 in 2011
to 32,823 in the last 12 months.
Table Eleven: Plug-in car grant levels from March 2016
CO2
emissions Zero-emission range Grant
Category 1 < 50 g/km ≥ 70 miles 35% of cost up to £4,500
Category 2 < 50 g/km 10 – 69 miles 35% of cost up to £2,500
Category 3 50 – 75 g/km ≥ 20 miles 35% of cost up to £2,500
Plug-in car grant levels from March 2016
NB: Cars in categories 2 and 3 that cost £60,000 or more are not eligible for the grant.

23
5.5. London
• Almost all of Greater London
is covered by its Low Emission
Zone, which has been in
operation since 2008. Vans over
1,205kg that do not meet Euro
3 emissions standards must
pay a £100-a-day charge to
drive in the zone, whilst lorries
over 3,500kg that do not meet
Euro IV must pay £200 a day.
• New Mayor of London Sadiq
Khan has accelerated and
extended plans for a new Ultra-
Low Emission Zone (ULEZ). A
£12.50-a-day charge would
apply to cars and vans that do
not meet Euro 4 (for petrol) or
Euro 6 (for diesel) standards,
and a £100-a-day charge
would apply to lorries that do
not meet Euro VI.
• Under Khan’s proposals, the
ULEZ would be introduced
in 2019 covering the existing
Congestion Charge Zone in
central London, rather than
2020 as previously planned.
It would then be extended in
2020 to the North and South
Circular Roads for cars and
vans and to the whole of
London for lorries.
• Until the ULEZ comes into
effect, Khan intends to levy
a £10-a-day ‘Emissions
Surcharge’ from 2017
on vehicles driving in the
Congestion Charge Zone that
do not meet Euro 4 emission
standards.
5.6. Go Ultra Low cities
• Outside of London, the
Government has awarded
multi-million-pound grants to
turn Bristol, Nottingham and
Milton Keynes into ‘Go Ultra
Low’ cities, encouraging the
use of ULEVs.
• Bristol will offer free residential
parking for ULEV owners, install
rapid chargepoints, and give
residents the chance to try a
ULEV by leasing it for up to four
weeks.
• Nottingham will give ULEV
drivers use of 13 miles of bus
lanes, discounted parking
and more chargepoints, as
well as giving businesses the
opportunity to try out ULEVs
before they buy.
• Milton Keynes will set up an
‘Electric Vehicle Experience
Centre’ in the city centre to
provide information, advice and
short-term loans for ULEVs.
ULEV drivers will also get free
parking in the city and use of all
bus lanes.
Table Twelve: Registrations of cars eligible for the plug-in grant: rolling annual total
Jan 2012
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Jul 2012 Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jul 2015Jan 2015 Jan 2016
Registrations of cars eligible for the plug-in grant: rolling annual total

6. Technology
Driverless cars, alternative
fuels and a production-line
revolution.
24

25
6.1. Alternatively-fuelled
vehicles
• Alternatively-fuelled vehicles
(AFVs) continue to grow in
popularity and make up an
increasing share of the new car
market. 80,856 alternatively-
fuelled cars were newly registered
in the 12 months to June 2016,
a 22 per cent increase on the
previous 12 months.
• AFVs represented 3.2 per cent of
all new car registrations in the first
half of 2016, up from 2.8 per cent
in 2015 and 1.3 per cent in 2011.
• Big improvements in the range
and cost of electric cars are
helping to drive this growth. The
Nissan Leaf and the Renault Zoe
can now go 150 miles on a single
charge. The Peugeot iOn and the
Citroën C-Zero start at £12,495
after the Government’s plug-
in car grant. Tesla has recently
introduced new entry-level
versions of its Models S and X,
with ranges of 250 miles and 220
miles – and price tags of £53,400
and £64,100 – respectively.
6. Technology
Improvements in
the range and cost
of electric cars are
helping to drive
growth.
Table Thirteen: New car registrations by fuel type: rolling annual totals
New car registrations by fuel type: rolling annual totals

26
6.2. Scalable car manufacture
technology
• Car manufacturers are
increasingly utilising
standardised components and
processes to produce different
models. This allows multiple
models to be built on the same
assembly line, saving costs and
giving manufacturers greater
flexibility over production, while
retaining some diversity in model
design.
• The Volkswagen Group’s
‘Modular Transverse Matrix’
(MQB, from the German
‘Modularer Querbaukasten’) is
now used to produce the Audi
A3, the VW Golf, the Seat Leon
and the Skoda Octavia – and
they intend to add a lot more in
the near future, with the aim of
producing 5 million cars a year
using MQB.
• In 2014, the Volvo XC90
became the first car built using
Volvo’s new ‘Scalable Product
Architecture’ platform, and from
2017 it will be joined by models
built using the firm’s smaller
‘Compact Modular Architecture’
platform. Volvo then intends to
build all its new cars using these
two systems.
6.3. Autonomous vehicles
• Given the number of accidents
caused by driver error (see
Section 7), autonomous (or
‘driverless’) cars have the
potential to make roads safer, as
well as making journeys quicker
and smoother.
• In July 2015, the government
announced a £20 million fund –
to be matched by industry – for
research and development of
autonomous vehicle technology.
In his final Budget in March,
George Osborne announced
that the Government would
conduct driverless car trials
on roads by 2017, and the
Government is currently
consulting on a package of
measures to accommodate
advanced driver assistance
systems and driverless
technology on the roads,
through changes to insurance
rules and the Highway Code.
Autonomous cars
have the potential
to make roads safer,
as well as making
journeys quicker
and smoother.

27
• Several manufacturers have
already developed models
with self-parking capability,
including the BMW i3, which
can be parked at the touch of
a smartwatch. In June 2015,
Jaguar Land Rover unveiled new
technology that allows owners
to ‘drive’ their car remotely via
a smartphone app, and the
company is currently working
to develop autonomous driving
technology that will work both
on- and off-road.
• There is a lot of scepticism
towards autonomous vehicles
among the public. A survey by
OSV Ltd in 2015 found that 75
per cent of the UK population
did not want a driverless car,
and another found that 72
per cent were anxious about
them, mainly because of safety
concerns. In an April 2016 poll
for IAM RoadSmart, just 20 per
cent of respondents said they
thought driverless cars were ‘a
good idea’, and 32 per cent said
they would consider using one.
65 per cent said that a human
should always be in charge of a
vehicle.
• Safety concerns around
driverless cars are likely to have
been heightened by news of
the death of Joshua Brown
while using his Tesla Model S’s
‘Autopilot’ feature in May.
6.4. Smart tachographs
• From March 2019, all newly
registered lorries (weighing
more than 3,500kg) and buses
(carrying more than 9 people) in
the European Union will have to
be fitted with new ‘smart’ digital
tachographs.
• These ‘smart tachographs’ will
include a GPS for recording
the start and end points of a
vehicle’s journey, as well as
its location every three hours.
This will remove the need for
the driver to enter a country
code when they start and stop,
and allow for more precise
positioning for enforcement
purposes.
• Enforcement officers will be able
to scan a vehicle’s tachograph
data wirelessly from the
roadside, which they can use
to decide whether to stop it for
potential offences.

28
7. Safety
Road casualties were higher in
2015 than in 2013, but the UK still
has one of the lowest rates of
road deaths in the world.

29
7.1. Road casualties
• After considerable
improvements in road safety
between 2000 and 2013 –
when the number of annual
road deaths was halved, and
injuries reduced by 43 per cent
– progress has stalled in the
past two years. Casualties rose
from 2013 to 2014 – the first
annual increase since 1997 –
and, though they did fall slightly
in 2015, they remained higher
than in 2013.
• According to the Department
for Transport’s latest statistics,
1,732 people were killed on
Britain’s roads in 2015. That is
2.4 per cent fewer than in 2014,
when 1,775 people were killed,
but 1.1 per cent higher than
2013’s record low of 1,713.
• The total number of road
casualties – including deaths,
serious injuries and slight injuries
– fell by 4.3 per cent, from
194,477 in 2014 to 186,209 in
2015. Again, that 2015 figure is
still slightly higher than the low
of 183,670 recorded in 2013.
• Some of the increase since
2013 is due to increased road
use. Drivers travelled a record
317 billion miles on British
roads in 2015, up 4.3 per cent
from 2013. Taking this into
account, the road casualty
rate has actually fallen slightly.
There were 5.5 deaths and 582
injuries per billion miles driven
in 2015, down from 5.6 deaths
and 599 injuries in 2013.
• 45 per cent of those killed on
Britain’s roads in 2015 were
occupants of cars, 25 per cent
were pedestrians, 19 per cent
were motorcyclists and 6.4 per
cent were cyclists. 54 (3.1 per
cent) were aged under 16.
• The Department for Transport
estimates that road traffic
accidents cost the UK economy
£16.3 billion in 2013.
7.2. International comparison
• The UK still has one of the
lowest rates of road deaths in
the world, as the graph above
shows. There were 29 deaths
per million people in 2014,
compared to 38 in Japan, 42 in
Germany, 51 in France, and 102
in the USA.
7.3. The causes of accidents
• The most common factor
recorded by police officers as
contributing to road accidents
is a failure on the part of the
driver or rider to look properly.
In 2014, this contributed to 44
per cent of all road accidents.
Other common contributing
factors were: failure to judge
another person’s path or speed
(22 per cent); carelessness,
recklessness or hurry (18 per
cent); a poor turn or manoeuvre
(16 per cent); and loss of control
(13 per cent).
• Hitachi Capital Vehicle Solutions’
Road Safety Survey 2015/16
found that driver overconfidence
may be a significant problem.
89 per cent of drivers consider
themselves to be safer than
most other drivers, and 66 per
cent admitted to having broken
the speed limit more than once
in the past two to three months.
Many also drive distracted:
34 per cent said they thought
about personal matters, and 27
per cent about work while at the
wheel.
Table Fourteen: Reported road casualties by severity
Reported road casualties by severity
Source: Department for Transport

30
7.4. New road safety measures
• Campaigns such as ‘20’s
Plenty’ and Brake’s ‘GO 20’
have led to a proliferation of
20mph zones in built-up areas.
As a result, the number of
casualties on 20mph roads has
more than doubled since 2011.
However, the number of deaths
on roads with either a 30mph
speed limit or a 20mph one
has fallen by 14 per cent in the
same period.
• In its Road Safety Statement in
December, the Government set
out a number of actions it would
take to improve road safety.
Among these were: increasing
the penalty for dangerous in-car
mobile phone use from £100 to
£150; strengthening compulsory
basic training for motorcyclists;
and allowing learner drivers to
gain experience of motorway
driving before their tests.
• In its Road Traffic Law
Enforcement report, published
in March, the House of
Commons Transport Committee
called on the Government to
halt the decline in the number
of specialist road traffic officers
in order to tackle speeding,
drink driving and other motoring
offences.
• In July, the Driver and Vehicle
Standards Agency announced
new measures to improve road
safety through better MOT tests.
New testers will have to obtain a
new qualification, and all testers
will have to undertake training
and pass annual assessments.
• The European Commission is
currently conducting a review of
its requirements for professional
drivers. New proposals may
be brought forward to improve
safety, as well to make the rules
clearer and more consistent.
7.5. eCall
• A European Commission
initiative will require all new cars
in Europe to be fitted with ‘eCall’
technology from April 2018. This
will place an automatic call to
the closest emergency centre
in the event of an accident, and
send location data.
• The aim is to reduce response
times for emergency services,
but there are concerns about
costs and privacy, with
questions around ownership
of the data and the potential
for manufacturers to use it for
commercial gain.
7.6. Emergency braking
and lane departure warning
systems
• Under European Union law,
medium and heavy commercial
vehicles registered since
November 2015 must be fitted
with Lane Departure Warning
Systems and Advanced
Emergency Braking Systems.
Stricter requirements on the
emergency braking systems will
come into effect in November
2016.
89 per cent of drivers consider themselves
to be safer than most other drivers.
Table Fifteen: Road deaths per million population, 2014
Road deaths per million population, 2014
Source: Department for Transport

31
Economic and fiscal outlook –
March 2016
Office for Budget Responsibility,
16 March 2016
‘Record six months for new car
market but demand stabilises over
second quarter’
SMMT, 6 July 2016
‘Demand for heavy vans drives
first-half record for UK market’
SMMT, 6 July 2016
‘Record volumes put pressure
on used prices’
CAP Automotive, 15 January 2016
Spending Review and Autumn
Statement 2015
HM Treasury, 25 November 2015
Budget 2016
HM Treasury, 16 March 2016
Weekly road fuel prices
Department of Energy & Climate Change
Pocket Guide to IFRS Standards: the
global financial reporting language
Paul Pacter, IFRS Foundation, 2016
Budget 2010: Securing the recovery
HM Treasury, 24 March 2010
Investing in Britain’s future
HM Treasury, 27 June 2015
National Infrastructure Delivery Plan,
2016–2021
Infrastructure and Projects Authority,
23 March 2016
Road Investment Strategy: for the
2015/16 – 2019/20 Road Period
Department for Transport, 12 March 2015
New Car CO2
Report 2016
SMMT, 2016
New Plug-in Car Grant Levels from
March 2016
Office for Low Emission Vehicles,
22 February 2016
Electric Vehicle Homecharge Scheme
– Guidance for customers: 1 July 2016
Office for Low Emission Vehicles,
21 June 2016
June 2016 – EV registrations
SMMT, 6 July 2016
‘About the LEZ’
Transport for London
‘Ultra Low Emission Zone’
Transport for London
‘Sadiq Khan unveils action plan to
battle London’s toxic air’
Mayor of London, 5 July 2016
‘Introducing the proposed Emissions
Surcharge’
Talk London, 4 July 2016
‘Go Ultra Low Cities winners
announced’
Go Ultra Low, 25 January 2016
‘Electric Cars’
nextgreencar.com
‘Tesla Model S 60 and 60D
introduced’
Sam Sheehan, Autocar, 9 June 2016
‘Tesla Model X 60D introduced to
SUV line-up’
Darren Moss, Autocar, 13 July 2015
‘Explained: the VW Group’s MQB
Platform’
Top Gear, 21 March 2014
‘All-new XC90 the first Volvo built on
the company’s new Scalable Product
Architecture’
Volvo, 12 August 2014
‘Volvo Cars’ new global compact
car range to be built on innovative
architecture’
Volvo, 15 October 2015
Pathway to Driverless Cars:
Proposals to support advanced driver
assistance systems and automated
vehicle technologies
Department for Transport, 11 July 2016
‘Hands-on with BMW’s self-parking i3’
Sean Cooper, Engadget, 9 January 2014
‘Watch the Land Rover you can
remote control with a smartphone
app’
Alan Tovey, The Telegraph, 16 June 2015
‘Would you want a driverless car?
75% of the UK population don’t!’
Tom Watts, Business Car Manager,
30 July 2015
‘Safety is biggest concern over
driverless cars, finds OSV survey’
Fleet News, 2 September 2015
‘Motorists want “the right to drive”’
IAM RoadSmart, 28 April 2016
‘US opens investigation into Tesla
after fatal crash’
Dave Lee, BBC News, 1 July 2016
‘Tachograph’
European Commission, 30 March 2016
Reported Road Casualties Great
Britain: 2014 – Annual Report
Department for Transport,
25 September 2015
Reported road casualties in Great
Britain: main results 2015
Department for Transport, 30 June 2016
Are we as safe on the roads as we
think? – Hitachi Capital Vehicle
Solutions Road Safety Survey 2015/16
Hitachi Capital Vehicle Solutions,
June 2016
Working Together to Build a Safer
Road System – British Road Safety
Statement
Department for Transport,
21 December 2015
Road traffic law enforcement
House of Commons Transport
Committee, 15 March 2016
‘Raising the standard of MOT testing
to improve road safety’
Driver and Vehicle Standards Agency,
12 July 2016
‘eCall: Time saved = lives saved’
European Commission, 26 January 2016
‘New EU Regulations on Advanced
Emergency Braking Systems and Lane
Departure Warning Systems Published’
InterRegs, June 2012
Sources and Further Reading

32
Glossary
Alternatively-fuelled vehicle
A vehicle that runs on fuel other than
petrol or diesel – such as electricity, solar
power or biofuels – including hybrids.
Autonomous car
A car that can sense its surroundings
and navigate without human input,
allowing it to drive without a driver.
Benefit-In-Kind tax
A government tax on the benefits that
employees receive in addition to their
salary.
Brexit
Britain’s exit from the European Union,
expected following the result of the
referendum on 23 June 2016.
Capital allowance
The sum of money a business spends
on plant and machinery – including
vehicles – that it can deduct from its
profits before tax liability is calculated.
Conformity factor
The ratio of acceptable levels to the
prescribed limit. So, if a conformity
factor of 2.1 applies to a NOx emission
limit of 0.08g/km, the actual acceptable
maximum level is 0.168g/km.
Financial year
April to March, inclusive. So 2016-17
refers to: the beginning of April 2016 to
the end of March 2017.
Fuel duty
A government tax on the sale of petrol,
diesel and other motor fuels. The current
rate for petrol and diesel is 57.95 pence
per litre. Value Added Tax of 20 per cent
is also applied to the total cost of fuel
including fuel duty.
Hybrid Bill
A Parliamentary bill that affects both
the public in general and certain
private interests – often involving large
infrastructure projects. Hybrid Bills
have a longer process of Parliamentary
scrutiny than ordinary Public Bills.
Examples of laws passed as Hybrid Bills
include the Channel Tunnel Act 1987
and the Crossrail Act 2008. The only
Hybrid Bill currently before Parliament
is the High Speed Rail (London – West
Midlands) Bill, relating to the High Speed
2 rail line.
Insurance Premium Tax
A Government tax on insurance
premiums. The standard rate is currently
9.5 per cent.
Mileage Allowance Relief
Tax relief that individuals can claim if they
use their own car for business purposes.
The amount for cars is currently 45p per
mile for the first 10,000 miles in the tax
year and 25p per mile after that.
MOT test
A safety and emissions test that vehicles
must undertake three years after
registration and every year after that.
Vehicles may not be driven on the road
if their MOT certificate has expired and
they have not passed a new test.
Public sector net investment
A measure of government spending
on infrastructure, defined as net capital
formation plus net capital transfers
minus depreciation. In 2015-16 it was
£33.8 billion.
Productivity
Economic output per worker, per hour or
per job.
Real driving emission tests
Improved tests designed to assess
emissions of pollutants by vehicles under
real-life conditions.
Residual values
The remaining value of an asset – such
as a car – after it has depreciated fully.
Smart Motorways
Sections of motorways that use
technology to improve traffic flow, for
example by changing the speed limit or
allowing driving in the hard shoulder.
Tachograph
A device that records a vehicle’s speed
and distance travelled, as well as other
data. All commercial vehicles must be
fitted with one.
Ultra-low emission vehicle
A vehicle that emits less than 75 grams
of carbon dioxide per kilometre and
can drive for at least 10 miles with no
emissions.
Vehicle Excise Duty
An annual Government tax on cars used
on the road, based on their fuel types
and levels of carbon dioxide emissions.
Zero-emission vehicles
A vehicle that emits no pollutants.

33
Acronyms
AFV: Alternatively-fuelled vehicle
AMAP: Approved Mileage Allowance Payment
BIK: Benefit-in-kind
CCT: Company car tax
CO2: Carbon dioxide
FYA: First Year Allowance
g/km: Grams per kilometre
gCO2
/km: Grams of carbon dioxide per kilometre
GAAP: Generally Accepted Accounting Principles
GDP: Gross Domestic Product
GPS: Global Positing System
HMRC: Her Majesty’s Revenue & Customs
HS3: High-speed 3
IASB: International Accounting Standard Board
IFRS: International Financial Reporting Standard
IPT: Insurance Premium Tax
MAR: Mileage Allowance Relief
MQB: Modular Transverse Matrix
NIC: National Insurance Contribution
NOx: Oxides of nitrogen
OBR: Office for Budget Responsibility
RV: Residual value
SMMT: Society of Motor Manufacturers and Traders
ULEV: Ultra-low emission vehicle
ULEZ: Ultra-low emission zone
VED: Vehicle Excise Duty
VW: Volkswagen

34

Hitachi Capital Vehicle Solutions, a division of
Hitachi Capital (UK) PLC, provides comprehensive
fleet finance, management and consultancy services
for individuals and organisations of all sizes operating
cars, LCVs, HGVs, Plant specialist and mission critical
vehicles and assets.
Hitachi Capital Vehicle Solutions is a division of Hitachi Capital (UK) PLC
Registered in Cardiff No. 1630491
Registered Office: Hitachi Capital House, Thorpe Road, Staines-upon-Thames, Surrey TW18 3HP
Authorised and regulated by the Financial Conduct Authority.
HC_Vehicles
Facebook.com/HitachiLeasing
LinkedIn.com/company/HitachiCapitalVehicleSolutions
This document can be downloaded from
Hitachi Capital Vehicle Solutions
Kiln House,
Kiln Road,
Newbury,
Berkshire,
RG14 2NU

HCUK-mid-year-review

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