The key motoring points from the Chancellors 2014 Budget are as follows:
• Road tax goes up in line with inflation
• The freeze on fuel duty continues
• Company Car tax benefit in kind will increase from 2017
Increases in Road Tax
Road tax will increase in line with inflation for all cars in Band D or above. Dependent on the band the increase will be between £5 and £10 on the first years duty, although those vehicles at the higher end of the CO2 banding will increase by up to £25.
Band CO2 2014/15 1st years duty Existing Duty Increase
A up to 100g/km £0 £0 N/A
B 101-110g £0 £0 N/A
C 111-120g/km £0 £0 N/A
D 121-130g/km £0 £0 N/A
E 131-140g/km £130 £125 £5
F 141-150g/km £145 £140 £5
G 151-165g/km £180 £175 £5
H 166-175g/km £290 £285 £5
I 176-185g/km £345 £335 £10
J 186-200g/km £485 £475 £10
K 201-225g/km £635 £620 £15
L 226-255g/km £860 £840 £20
M Over 255g/km £1090 £1065 £25
Motorists can also pay for their tax discs by Direct Debit, although there will be a 5% charge added to monthly of biannual direct debits.
The paper tax disc is due to be phased out in October 2014. All information for vehicles is now stored on a central database which is accessed by law enforcement agencies. The database includes details on motor insurance, MOT status and whether the Vehicle Excise Duty has been paid.
Chancellor George Osborne has cancelled this Septembers increase in fuel duty. The Chancellor announced that fuel is now 20p per litre cheaper than it would have been had the fuel duty escalator been implemented as previously planned.
The Chancellor also announced that the Government has applied to the European Commission for a 5p per litre fuel discount in the 17 most rural parts of the UK mainland.
Increase to Company Car benefit in kind from 2017
The Chancellor announced increases to Company Car tax rates for the tax years 2017/18 and 2018/19. Rates are set to rise by 2% for all cars emitting CO2 of more than 75g/km. The maximum rate will be capped at 37% so by 2018 cars emitting CO2 of 180g/km or more will be liable for the 37% maximum rate of company car tax.
Other information from the Budget
A pledge of £200m to repair damage to the UK’s roads was made. Local authorities will have to bid for a share of the funding . The estimated cost of repairing the UK’s roads in 2012 was £10billion.