MHA | Positive measures announced for the Automotive sector in the…

Positive measures announced for the Automotive sector in the Autumn Statement

Alastair Cassels · Posted on: November 23rd 2023 · read

Car wheels on road

It would be churlish not to recognise some of the measures detailed in the Autumn Statement, as positives for the Automotive sector.

  1. £2bn earmarked to support investment in strategies that support the drive to net zero is by far the largest tranche of the £4.5bn identified for UK industry and this will be welcomed by vehicle manufacturers and suppliers.
  2. Permanency to the current Capital Allowance regime which allows fully expensing and will aim to stimulate investment in the UK economy by £3bn per annum.
  3. Promises to simplify planning consents for investment in EV Charging Infrastructure.
  4. Faster connectivity of EV Charging outlets to the grid.

All of the above are essential to funding, implementing and accelerating the Net Zero transition that Automotive is leading the way on. However, as we are 80% of the way through this parliament the question must be asked - what took so long. Government will point to Covid, Ukraine and rising debt to excuse the tardiness of these measures but Britain's investment cycle has been flatlining since 2016 whilst is trumpeted ambitious decarbonisation plans for road transport.

The sector needed this sort of support and clarity at least five years ago not halfway towards the 2030 ZEV Mandate. Investments in Battery technology take time to realise and we are firmly in catch up mode vs many other competitor countries. Whilst not a fiscal issue the current unresolved Rules of Origin dispute with the EU poses a bigger short-term threat to the sector than these measures can remedy. This issue must reach a mutually satisfactory conclusion for the sector in the UK and Europe to remain competitive with Asian imports.

In summary, the measures are welcomed but would have had greater impact at the start of the parliament than towards the end, and without the recent softening of net zero commitments.

Check out our 10 Key Points from the Autumn Statement

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For further guidance

For further guidance on any of the tax measures discussed in this article, please contact your usual MHA advisor or contact us

Read the latest Autumn Statement 2023 commentary on our dedicated hub, where we will be providing resources, advice and practical guidance on what any new tax measures mean for you and your business, to help you prepare for and manage their impact.