What the Budget means for motorists

Budget illo

Tax on fuel will not go up this September, as had been planned, chancellor George Osborne confirmed in last week's 2013 Budget announcement. 

 
'I am cancelling this September's fuel duty increases altogether," said Osborne. 'Fuel is now 13p cheaper than it would have been,' he claimed. 
 
This means the cost of refuelling the UK's best-selling car - the Ford Focus - remains the same. According to Petrolprices.com, a litre of petrol currently costs 133.7p, while diesel costs 144.7p, which means it will cost £75.76 to refuel a Focus 1.0-litre Ecoboost, while the Focus 1.6-litre diesel will cost £76.60.
 
Edmund King, president of the AA, welcomed the announcement, saying, 'A September fuel duty hike would have been the last straw, likely to break UK drivers' budgets. The freeze is a pragmatic move and will bring some relief at the pumps.'
 
More company car tax bands 
The chancellor also announced future changes to the company car tax bands effecting cars emitting up to 76g/km CO2. Currently, all cars emitting 0-75g/km are subject to 5% company car tax. However, in 2015-2016 this band will be split in half, with cars emitting 0-50g CO2 subject to 5% tax, rising to 7% the following year; over the same period, cars, emitting 51-75g CO2 will be in a 9% bracket for the first year, rising to 11% in the second. 
 
In the future, the Government intends to reduce the percentage difference between the 0-50g and 51-75g brackets, and between the 51-75g and 76-94g brackets, to encourage those with company cars to choose the greenest models as they become available. Any future company car tax rates will be announced three years in advance. 
 
In addition, from 6 April 2014 the company fuel benefit multiplier will increase by the rate of inflation. Currently, the multiplier is set at £20,000 - this is multiplied by your company car's tax rate according to its CO2 output, to calculate your taxable annual fuel benefit. 
 
Road tax 
Motorists will now have up to 14 days to display a new tax disc following application or renewal. The pricing system for road tax itself remains unchanged, with no plans for significant changes to it in this parliament. However, from 1 April 2014 classic car tax exemption has been moved forward by a year, so cars built before January 1, 1974, will now qualify for a free tax disc. Previously this applied only to cars built before January 1, 1973.
 
Less paperwork for cars not in use
Motorists wanting to declare their car as being off the road (which means they don't have to be taxed) will no longer have to do so on an annual basis, because SORN (Statutory Off Road Notification) declarations are now open ended.