Chancellor Philip Hammond’s third Budget announcement, delivered this week, had a lot more riding on it than usual. That’s because it was the final Budget ahead of the UK’s scheduled departure from the European Union on March 29th, 2019.
In the event of a no-deal Brexit, we can expect an emergency Budget not long after, but what did the chancellor promise motorists in this hugely symbolic Budget?
Fuel duty frozen for ninth year running
Prime minister Theresa May broke this one during her speech at the Conservative Party Conference in early October, but Mr Hammond confirmed it in the Commons.
The scheduled rise in fuel duty from April 2019 would be cancelled, signalling the ninth consecutive year of no changes to the tax.
As a result, by April 2020, the average motorist will have saved more than £1,000, rising to £2,500+ for the average van driver.
Pothole repairs
The particularly nasty winter we suffered last time round has left Britain’s roads in an especially sorry state in some regions.
As such, £420 million will be allocated to local authorities in 2018/19 to tackle potholes, repair damaged roads and invest in keeping bridges open and safe.
A further £150 million of Northern Powerhouse Investment Funding will be available to local authorities for small improvement projects, such as roundabouts.
£28.8 billion for National Roads Fund
Cash collected via road tax (or Vehicle Excise Duty as it is officially known) will be directed into a National Roads Fund to the tune of £28.8 billion.
Between 2020 and 2025, this cash will provide long-term certainty for roads investment, including the new major roads network and large local major roads schemes, such as the North Devon Link Road.
Company car benefit-in-kind tax
The introduction of the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) in September has delayed the chancellor from announcing any company car benefit-in-kind tax changes.
So for now, company car drivers only know benefit-in-kind tax rates up to the end of 2020/21 – we can expect numbers beyond this date in spring 2019.
Nonetheless, for cars registered prior to April 6th, 2020, HM Revenue and Customs will continue to use the current New European Driving Cycle (NEDC) test procedure for the purposes of collecting company car tax.
Vehicle Excise Duty
Vehicle Excise Duty rates for cars, vans and motorcycles will increase in line with the Retail Price Index from April 2019.
Electric cars will continue to be effectively exempt from road tax – paying £0 – but every petrol car emitting 1-50g/km of CO2 will be subject to £10 in the first year (£25 for diesels), rising to £145 for every year after that.
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