The Budget: Motoring Headlines 21 | 03 | 2012
IT WON'T HAVE passed your notice that the Chancellor George Osborne held his annual Budget today. We bring you the key announcements which will impact on the motor industry
Fuel: The 3.02p per litre fuel duty increase scheduled for August 1, 2012, will go ahead.
Vehicle Excise Duty (VED) rates 2012-13: From April 1, 2012, VED rates will increase in line with the RPI, apart from VED rates for Heavy Goods Vehicles which will be frozen in 2012–13.
The Government is to consider whether to reform VED over the medium term to ensure that all motorists continue to make a fair contribution to the sustainability of the public finances, and to reflect continuing improvements in vehicle fuel efficiency.
In addition, the Government aims to develop a direct debit system to allow motorists to spread their VED payments. The Government will seek the views of motoring groups on these measures.
Company car tax rates 2014-16: The appropriate percentage of list price subject to tax will increase by 1% for cars emitting more than 75g/km of carbon dioxide, to a maximum of 35% in 2014-15, and by 2%, to a maximum of 37% in both 2015-16 and 2016-17.
From April 2015, the five-year exemption for zero carbon and ultra low carbon emission vehicles will come to an end. The appropriate percentage for zero emission and low carbon vehicles will be 13% from April 2015 and will increase by 2% in 2016–17.
From April 2016, the Government will remove the 3% diesel supplement differential so that diesel cars will be subject to the same level of tax as petrol cars.
The Government will exclude certain security enhancements from being treated as accessories for the purpose of calculating the cash equivalent of the benefit on company cars made available for private use. The changes take effect retrospectively from April 6, 2011.
Van benefit charge: The Government will freeze the van benefit charge at £3000 in 2012-13. From April 2015, the five-year exemption for zero carbon vans from the van benefit charge will expire.
Car fuel benefit charge (FBC) 2012–13 and 2013–14: From April 6, 2012, the FBC multiplier for company cars will increase from £18,800 to £20,200, and will increase by 2% above the RPI in 2013-14. The Government has also committed to pre-announcing the FBC multiplier one year ahead.
Van fuel benefit charge (FBC) 2012–13 and 2013–14: From April 6, 2012, the van FBC multiplier will be frozen at £550, and will increase by the RPI in 2013–14. The Government has also committed to pre-announcing the FBC multiplier one year ahead.
Capital allowances — business cars first-year allowances (FYAs): From April 2013, the Government will extend the 100% FYA for businesses purchasing low emissions cars for a further two years to March 31, 2015. The carbon dioxide emissions threshold below which cars are eligible for the FYA will also be reduced from 110g/km to 95g/km, and leased business cars will no longer be eligible for the FYA.
Capital allowances — business cars main rate: From April 2013, the carbon dioxide emissions threshold for the main rate of capital allowances for business cars will reduce from 160g/km to 130g/km. The threshold above which the lease rental restriction applies will also reduce from 160g/km to 130g/km.
Look out for a more detailed analysis of the Budget later.
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Jim McGill