Phillip Hammond, the current chancellor of the exchequer, announced the 2017 budget recently. As ever, drivers are affected for both the better and the worse. We have broken down the key points below to show how this new budget will impact on you.
Freeze on Fuel Duty
Let’s start with some good news for the UK’s 37 million drivers: fuel duty in the UK has been frozen for the 8th year running. Many of us will remember the runaway petrol prices which punctuated the early 2000s, which impacted so heavily on drivers and businesses. The freeze
Rise in Insurance Premium Tax (IPT)
Now onto slightly less good news. The rise in IPT announced in the autumn 2016 statement is still set to be implemented on June 1st.
Currently, IPT stands at 10% but from June it will be 12%. Whilst this may not sound like a life changing figure, as AA president Edmund King pointed out it actually represents “a 100% increase within two years. This is unprecedented in modern tax history”.
Changes to Road Tax
Drivers of new cars will pay tax according to the C02 emissions of their vehicles for the first year after registration, however as of year two any vehicle which emits more than 1 gram of C02 will be liable to pay a standard tax rate of £140, while any hybrids or alternatively fueled vehicles will be taxed at £130.
Higher end vehicles with a price tag exceeding £40,000 will have to pay a £310 a year levy for five years after year two.
On a slightly more positive note, tax rates for HGV operators and hauliers were frozen for another consecutive year.
Diesel Scrappage Scheme
With renewed efforts to improve air quality in the UK, many were anticipating an announcement related to taking vehicles with high emissions levels off the road, especially as Low Emissions Zones (LEZs) become more common. There was also talk of the introduction of a diesel scrappage scheme as an incentive to get people to replace their older vehicles with new, lower emission models.
However, this announcement did not come, although Theresa May is committed to implementing a new clean-air strategy so watch this space…
We will keep you updated with any more developments which will impact on you and the rest of the drivers in the UK.