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NFDA comments on Budget 2021

NFDA 03/03/2021

The National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, comments on the measures announced in today’s Budget by Chancellor Rishi Sunak.

Business rates holiday

The full business rates holiday will be extended until June, rates will be discounted by two thirds for the following nine months.

Sue Robinson, NFDA Chief Executive, commented: “We have previously highlighted that the Business Rates Holiday represented one of the most welcome forms of financial support offered by the Government during the pandemic. Following our requests for a business rates holiday extension submitted ahead of the budget, today’s announcement is positive, as it will continue to support retailers while the economy reopens, and we come out of the pandemic”.

Furlough extension

The Chancellor has announced the furlough scheme will be extended until the end of September. Employees will continue to receive 80% of their wages until the scheme ends; businesses will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.

During the pandemic, nearly all dealers accessed the Coronavirus Job Retention Scheme, especially when only key staff working in essential maintenance and repair could continue to work. Currently, as showrooms are due to remain shut in March, there is a proportion of dealers still benefiting from the scheme. NFDA had called on the Government to ensure that the capability to furlough staff could be retained while restrictions remain in place.

Sue Robinson said: “It is encouraging that the furlough scheme has been extended, allowing dealers to retain staff while levels of demand remain subdued due to the current restrictions.  However, dealers are looking forward to reopening and returning to full operations to be able to meet their customers’ needs”.


Apprentice incentive payments will be doubled to £3,000.

Sue Robinson commented: “The incentives will be well received by the automotive industry, a sector which is committed to creating new opportunities, investing in the workforce of the future and upskilling current staff to meet the requirement for new skills”.

Corporation tax and ‘super deduction’

In 2023 the rate of corporation tax, paid on company profits, will increase to 25%. In addition to the announcement about the corporation tax, the Chancellor has unveiled a ‘super deduction’ tax relief aimed at supporting business investments. For the next two years, businesses will be able to claim 130% of their new “machinery cost” as a tax cut.

Sue Robinson commented: “Due to the significant challenges facing our economy, the announcement about the rise in corporation tax was not unexpected. However, the fact that the increase will not come into effect until 2023 will give businesses some time to start to recover from the current disruption. The ‘super deduction’ tax relief will partly offset this increase especially as retailers need to make further investments into their sites to meet changing demand.”

Fuel duty freeze

Sue Robinson commented: “It is positive that fuel duty will remain frozen for another year. This decision will benefit motorists and support personal mobility as more people return to work and seek to avoid public transport, giving greater importance to car ownership”.

UK infrastructure bank

Sue Robinson said: “As retailers continue to play a crucial role during the transition to zero emission vehicles, we will be looking at how retailers can benefit from this as they continue to make significant investments into their sites”.

Personal allowance

Rates of income tax, national insurance and personal tax thresholds will remain frozen.

Sue Robinson added: “Following months of lockdown, it is important to support consumers and instill confidence; these measures will help the economy bounce back and encourage people back into the marketplace”.

Sue Robinson concluded: “We will now look closely at the measures announced and the impact these will have on our sector. We will keep our members updated.”

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About the RMI

The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.