Finance Bill – in a Public Bill Committee am 2:15 pm ar 11 Mehefin 2013.
Catherine McKinnell
Shadow Minister (Treasury)
The clause extends the 100% first-year allowance for expenditure incurred on gas refuelling equipment that was due to end on 31 March 2013. It has now been extended to 31 March 2015. I note from the tax information and impact note that the policy objective of the measure is
“to support the development and installation of refuelling infrastructure for motor vehicles powered by natural gas, biogas and hydrogen as part of the process of promoting the wider uptake of such vehicles. The relief also complements the 100 per cent” first-year allowance
“for cars with low carbon dioxide…emissions that is being extended to 31 March 2015.”
It is estimated that the extension will have a negligible impact on the Exchequer. The latest information suggests that there were only 220 gas refuelled vehicles in 2010, and the number seems to have declined from 540 in 2007.
The tax information and impact note continues:
“It is expected that the majority of the businesses who will benefit from the decision to continue the relief, which provides a modest cash flow boost, are concentrated in the transport sector, either haulage or passenger transport.”
The tax information and impact note includes the latest number of gas refuelled vehicles in use, but will the Minister clarify how many gas refuelling stations throughout the UK will benefit from the measure? That information would help the Committee.
Sajid Javid
The Economic Secretary to the Treasury
The clause extends the existing 100% first-year allowance for capital expenditure on gas refuelling equipment for an additional two years to 31 March 2015. The Government are committed to supporting the UK’s progress towards European Union emissions targets and laying the foundation for a strong and sustainable low-carbon economy. As part of that commitment, we aim to place the UK at the global forefront of the design, development and uptake of low carbon emitting vehicles.
We have made £400 million available to the Office for Low Emission Vehicles to help to achieve that aim. However, alongside that, we want to maintain a strong package of support through the tax system. We have discussed 100% first-year allowances in some cases, and in this clause we are discussing the 100% first-year allowance for gas refuelling equipment that was first introduced in 2002 and forms part of the tax package. It encourages the development and installation of fuelling infrastructure for alternatively fuelled vehicles, reducing one of the key barriers to growth in that market.
The incentive was due to expire in April 2013, alongside the 100% first-year allowance for low emission vehicles. Clause 68 takes action to address that by extending the 100% first-year allowance for capital expenditure on gas refuelling equipment. The relief will be extended for two years to 31 March 2015. That aligns with the 100% first-year allowance for low emission vehicles, which is also extended by two years in the Bill. The extension of the relief recognises that the UK market for natural gas, biogas and hydrogen-powered vehicles is still in its infancy.
In the Budget 2013 the Government decided to go further. We announced that the 100% first-year allowance for expenditure on gas refuelling infrastructure would be extended for an additional three years to 31 March 2018. That is a clear signal of the Government’s intention to provide long-term support in the area as part of their wide objectives for the UK environment.
The hon. Lady asked about the number of vehicles in question. I do not have those numbers with me and do not want to take an educated guess. I will supply her with the number in writing.
To conclude, the clause extends the existing 100% first-year allowance for gas refuelling infrastructure by two years. It maintains the incentive for the development and uptake of alternatively fuelled vehicles.
