Budget Reaction

Date: Thursday 07 March 2024

---

Kevan Wooden, CEO at LKQ UK & Ireland, said: “Garages and workshops will find few gifts for them in the Spring Budget - with the Chancellor largely focused on addressing the consumer tax burden, while continuing to toe a cautious line on public spending as the economy gets back on track.

“A handful of the industry’s smallest players will benefit from the threshold for VAT registration increasing from £85,000 to £90,000. This could help to free-up vital cash for investment in the skills and equipment needed to supercharge growth. But the rise falls short of the £100,000 threshold that many small businesses had hoped the Chancellor would stretch to.

“The decision to make full expensing permanent, representing a £10 billion tax cut for businesses looking to invest in equipment and machinery, was warmly received in last November’s Autumn Statement. So, new intention to extend full expensing to leased assets will be similarly welcomed by garages and workshops wanting to invest in new electric vehicle (EV) or ADAS servicing equipment.

 

“However, it was a budget that felt more in favour of ICE then EV, with fuel duty frozen and no new incentives to help motorists to switch to plug-ins. Despite this, the transition to electric vehicles continues to be the direction of travel for the industry, being the present for many garages and workshops getting ahead of the competition. It will still be prudent for the industry to invest in the skills and equipment to service electric vehicles sooner rather than later to ensure their long term success.”

---