2013 Budget Summary: Positive news for fuel duty and CCT rates
The 3p per litre rise in fuel duty scheduled for September has now been cancelled.
Company Car Tax
Two new thresholds will be introduced from 2015/16 that will benefit drivers opting for ultra low emission vehicles (ULEVs).
From April 2015, two new CCT bands will be introduced at 0-50 grams/kilometre of carbon dioxide (g/km CO2) and 51-75 g/km CO
The appropriate percentage of the list price subject to tax for the 0-50 g/km CO2 band will be 5% in 2015-16, and 7% in 2016-17. The appropriate percentage of the list price subject to tax for the 51-75 g/km CO2 band will be 9% in 2015-16 and 11% in 2016-17.
In 2017-18 there will be a 3 percentage point differential between the 0-50 and 51-75 g/km CO2 bands, and between the 51-75 and 76-94 g/km CO2 band.
In 2018-19 and 2019-20 there will be a 2 percentage point differential between the 0-50 and 51-75 g/km CO2 bands and between the 51-75 and 76-94 g/km CO2 bands.
In future years company car tax rates will be announced three years in advance. The Government will review these incentives for ULEVs in light of market developments at Budget 2016, to inform decisions on CCT from 2020-21 onwards.
In last year’s Budget, the Chancellor announced that the 100% First Year Allowance would be extended until 2015 for cars emitting 95 g/km CO2. The Chancellor today announced a further three-year extension until 2018 for cars emitting 75 g/km CO2 or less.
Investment in infrastructure
Chancellor George Osborne has pledged an extra £3bn investment a year into the UK’s infrastructure, including roads and rail, from 2015/16 through cuts at Whitehall.
Mr Osborne said that the move, which equates to an extra £15bn of spending over the next decade, would ‘invest in the country’s economic arteries to get growth flowing to every part of it’.
Approved Mileage Allowance Payments (AMAPs) rates, which cover business mileage in a private car are to remain the same, at 45p/mile for the first 10,000 business miles, and 25p/mile for business mileage over 10,000.
VED rates to change in line with RPI
As part of the Budget announcement, Vehicle Excise Duty (VED) rates are to be stay stable with the Government saying that it has no plans to make signiﬁcant reforms to the structure of VED for cars and vans in this Parliament.
Instead VED rates will only rise in line with the Retail Price Index from 1 April 2013, apart from for heavy goods vehicles (HGVs) which will be frozen in 2013-14.
In addition, there is an extension to the amount of time that a tax disc does not have to be displayed, following the payment of tax, from five working days to 14 calendar days.
And legislative changes will be made that will allow advanced registration year round and 14 days in advance rather than just four days.
Fuel benefit charge
This will increase for both cars and vans in line with the Retail Price Index from 6th April 2014.
Van benefit charge
This will be frozen at £3,000 in 2013-14 and will be increased only in line with the Retail Price Index from 6th April 2014. Changes will be announced one year ahead.