Amongst all the pension statements and savings announcements in the Budget Statement of Chancellor of the Exchequer George Osborne, there were several notices to do with the motoring industry.
With Fuel Duty, there was a call to cut the amount of fuel duty that we pay as customers from campaign group FairFuelUK, but the Chancellor has decided to stick by his guns and stay with the announcement he made in his Autumn Statement of 2013 where he cancelled September’s planned 1.6p per litre rise in fuel duty and froze it. It all means that there will be no rise in fuel duty prior to the 2015 general election.
But it was also announced that there will be some sort of legislation that will be introduced in the 2015 Finance Bill with regards to applying a reduced rate of fuel duty of 9.32p per litre to methanol composed of 95% pure methanol and 5% water from April 1, until March 2024.
With Vehicle Excise Duty, from April 1st, Vehicle Excise Duty (VED) Rates will increase in line with the Retail Price Index RPI with the exception of Euro IV and V light goods vehicles VED in 2014/15 which the Government has frozen. Mr Osborne also announced a rolling 40 year VED exemption for classic vehicles – vehicles constructed 40 or more years ago – from April 1st every year. However, as announced at last year's Budget, from April 1, 2014 the Government will reduce and re-structure VED rates for HGVs within the HGV Road User Levy scheme.
With Company car tax; At the moment company cars get taxed if they emit more than 75 g/km of CO2, and the percentage of list price that is taxed is to rise by 2% to a maximum of 37%, in 2017/18 and 2018/19. And the Chancellor also reinforced the Government’s commitment to reviewing incentives for Ultra Low Emission Vehicles to inform decisions on company car tax from 2020/21 onwards.
The Government is also looking at ways of simplifying "the complex system" for reporting employees and employers that drive company vehicles and their own cars on work-related journeys could be introduced by the Government.
With Car fuel benefit, employees who get company-funded fuel and use it privately will see their benefit-in-kind tax bills rise from April 6, 2014; and the fuel benefit charge multiplier for company cars will also be increased from £21,100 in 2013/14 to £21,700 in 2014/15.
For those people that get van benefit-in-kind, their tax charge will increase from £3,000 in 2013/14 to £3,090 in 2014/15, and the van fuel benefit charge multiplier will increase from £564 to £581 on April 6th too.
And finally on the cars, vans, and motorists budget plans, following the bad weather and the effect on roads, especially potholes, in the budget the Chancellor announced a £200 million “potholes challenge fund” under the heading of “emergency funding.” Local authorities are allowed to bid for a share of the money so that they can repair some of the estimated 3.2 million potholes that appeared in roads following the recent severe weather.
All-in-all it seems that the Budget could have been worse for motorists – who are normally one of the ‘easy targets’ – and it could be considered OK for drivers everywhere in the UK. Here's what some vehicle industry figures felt about the budget:
SMMT Chief Executive Mike Hawes said: “We welcome measures to extend incentives for ultra-low emission vehicles (ULEVs) under the company car tax regime. Industry needs clear direction from government on how its £500m commitment to develop the ultra-low carbon vehicle sector between 2015-2020 will be allocated."
Road Haulage Association Chief Executive Geoff Dunning commented: “While proving positive for the manufacturing and export sectors, today’s Budget brought little encouragement for UK hauliers. The announcement that the fuel duty rise planned for September would be frozen came as no surprise; it was announced that this would be frozen for the duration of the current Parliament back in November last year.
“As far as we are concerned,” Geoff Dunning continued, "if you are a gambler or a drinker, today’s Budget brought good news. However, for the UK haulier, currently paying the highest level of fuel duty in Europe, there was scant encouragement. We were buoyed up at the pre-Budget announcement that the Chancellor had some ‘surprises’ up his sleeve. Sadly, they did not include a cut in fuel duty – the thing that our industry so desperately needs."
James Hookham, Freight Transport Association Managing Director of Policy and Communications said: “The Chancellor has kept his promise to freeze fuel duty and industry will be £187 million a year better off for that, but he missed the opportunity to stimulate the economy further by reducing fuel duty and putting around £690 million into the pockets of families and British business. This could have given a further stimulus to the economy and locked in the positive growth already achieved.”
And with regards to the £200m pothole black hole fund, IAM director of policy and research Neil Greig said: "Every little helps and it will be welcomed in many areas hit by this year’s bad weather. With a ten billion pound back log in repairs however, it is only through consistent long term funding that the pothole problem can finally be fixed."
I suppose you can't make everyone happy George.