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Budget 2015 – What it Means for UK Motorists

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Chancellor of the Exchequer George Osborne delivered his sixth Budget speech yesterday (Wednesday, March 18, 2015).
It was the Chancellor’s final Budget Statement before the country goes to the polls in the May 7th general election.

Company car tax

Company car benefit-in-kind tax rates will increase by three percentage points in 2019-20, the Budget papers reveal. Rates up to the end of 2018-19 were announced in last year’s Budget.

Company car benefit-in-kind tax tables published by HM Revenue and Customs (HMRC) reveal that in 2019-20 a car with CO2 emissions of 0-50 g/km will be subject to a rate of 16% of the P11D value of the vehicle; rising to 19% at 51-75 g/km, 22% at 76-94 g/km up to a maximum of 37% at 165 g/km and above (see table below).

The Government says it remains committed to reviewing incentives for ultra low emission vehicles in the light of market developments at Budget 2016, to inform decisions on company car tax from 2020-21 onwards.

Company car tax 2015-16 to 2019-20

% of  P11D 2015/16 2016/17 2017/18 2018/19 2019/20
Price CO2 (g/km) CO2 (g/km) CO2 (g/km) CO2 (g/km) CO2 (g/km)
0 N/A N/A N/A N/A N/A
5 0-50 N/A N/A N/A N/A
7 N/A 0-50 N/A N/A N/A
9 51-75 N/A 0-50 N/A N/A
10 N/A N/A N/A N/A N/A
11 N/A 51-75 N/A N/A N/A
12 N/A N/A N/A N/A N/A
13 76-94 N/A 51-75 0-50 N/A
14 95-99 N/A N/A N/A N/A
15 100-104 76-94 N/A N/A N/A
16 105-109 95-99 N/A 51-75 0-50
17 110-114 100-104 76-94 N/A N/A
18 115-119 105-109 95-99 N/A N/A
19 120-124 110-114 100-104 76-94 51-75
20 125-129 115-119 105-109 95-99 N/A
21 130-134 120-124 110-114 100-104 N/A
22 135-139 125-129 115-119 105-109 76-94
23 140-144 130-134 120-124 110-114 95-99
24 145-149 135-139 125-129 115-119 100-104
25 150-154 140-144 130-134 120-124 105-109
26 155-159 145-149 135-139 125-129 110-114
27 160-164 150-154 140-144 130-134 115-119
28 165-169 155-159 145-149 135-139 120-124
29 170-174 160-164 150-154 140-144 125-129
30 175-179 165-169 155-159 145-149 130-134
31 180-184 170-174 160-164 150-154 135-139
32 185-189 175-179 165-169 155-159 140-144
33 190-194 180-184 170-174 160-164 145-149
34 195-199 185-189 175-179 165-169 150-154
35 200-204 190-194 180-184 170-174 155-159
36 205-209 195-199 185-189 175-179 160-164
37 210+ 200+ 190+ 180+ 165+

 

  • For tax year 2015-16 add 3% for diesel cars up to a maximum of 37%
  • From 2016-17 petrol and diesel cars are treated equally for company car tax purposes.

 

Vehicle Excise Duty

Vehicle Excise Duty from April 1, 2015 for cars registered on or after March 1, 2001

The Chancellor announced a rate of inflation increase for Vehicle Excise Duty rates, but the majority of charges have been held at their 2014-15 levels, notably for lower emission vehicles.

VEDBand CO2 emissionsg/km 2015-16
First year rate* Standardrate*
A Up to 100 0 0
B 101-110 0 20
C 111-120 0 30
D 121-130 0 110
E 131-140 130 130
F 141-150 145 145
G 151-165 180 180
H 166-175 295 205
I 176-185 350 225
J 186-200 490 265
K** 201-225 640 290
L 226-255 870 490
M Over 255 1,100 505

 

*Alternative fuel discount 2015-16 £10 all cars

** Includes cars emitting over 225 g/km registered before March 23, 2006

Fuel Duty

The planned September 1, 2015 0.54p per litre fuel duty increase has been cancelled. In announcing the move, the Chancellor said the 2015 Budget built on the support provided by the government to motorists over the five years of the Parliament.

Mr Osborne calculated that the government will have eased the burden on motorists by £22.4 billion by the end of 2015-16 following the year-on-year freezing of fuel duty.

That, he said, equated to a saving of £675 for a typical motorist, £1,400 for a small business with a van, and £21,000 for a haulier.

Due to government action on fuel duty since 2011, by the end of 2015-16 the typical motorist will save £9 each time they fill their tank.

By the end of 2015-16, fuel duty will have been frozen for five years, the longest freeze for more than two decades.

This is of course welcome news to Warrantywise’s very own Quentin Willson, whose Fair Fuel UK campaign has been lobbying government relentlessly to stop any fuel duty rises in not only this parliament but any future government. Quentin said:

“Today’s Budget is very welcome that Fuel Duty has been frozen again. FairFuelUK has campaigned relentlessly to show that lower pump prices and in particular cutting duty stimulates GDP, generates new jobs and lowers inflation. But why doesn’t the Government go further and drive the UK economy continually upwards by cutting duty. It’s proven that will happen. We give Mr Osborne 6 out of 10 for endeavour and will continue to campaign that duty should be frozen for the lifetime of the next Parliament with more pressure on a real cut in the Autumn Statement.”

Car fuel benefit charge 2015-16

Employees who are in receipt of company-funded fuel used privately will see their benefit-in-kind tax bills rise from April 6, 2015.

The Chancellor has announced that the fuel benefit charge multiplier for company cars will increase from £21,700 in 2014-15 to £22,100 in 2015-16.

From April 6, 2016 the multiplier will once again increase by RPI.

Driverless cars

The Chancellor committed £100 million for research and development into intelligent mobility, which will focus on enhancing the development of driverless car technology and the systems required to implement and adopt the technology, such as telecommunications.

Earlier this year the government announced the launch of driverless car pilot schemes in Greenwich, Bristol, Coventry and Milton Keynes.



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