The 2014 Budget means that the Government could be up to £240 million pounds wealthier in 2017/18 and by 2018/19, they could be saving £480 million as a result of the announced changes.
It is no secret that the Chancellor of the Exchequer, George Osborne, wants to encourage the mass use of low emission vehicles. Let’s take a look at the 2014 Budget Announcement and how it affects the company car drivers of the UK; we have also covered the changes in VED (road tax).
Company Car Tax
George Osborne announced the new company car tax (benefit-in-kind) rates for 2017/2018 and 2018/2019. The rates that were announced in the previous budget were confirmed for 2016/2017, as was the abolishment of the 3% diesel supplement.
The gap between -50 and 51-75 g/km CO2 bands and 51-75 and 76-94 g/km bands was previously set to be three percent in 2017/18, going down to two percent in 2018/19. However, this has now changed; the differential will now be four percentage points and three percentage points respectively.
Click here for Company Car Tax Tables 2016/17, 2017/18 and 2018/19
From 1st April this year, Vehicle excise duty – or car tax, to me and you – will change for rates for all cars, motorcycles and vans, but the price increase is only set to increase in-line with inflation (Retail Prices Index or RPI).
Good news for Euro 4 and Euro 5 LCVs as VED will be frozen in 2014/15.
From April 1 2014, HGVs will become part of the Government’s Road User Levy scheme, where which involves the reducing and re-structuring of road tax rates for heavy goods vehicles.
If your car is over 40 years old then there’s great news for you – as previously announced, classic cars will be road tax exempt from April 1st.
And we finally wave farewell to the paper tax disc from October. The modern system will be computer reliant and road users will also have the choice to pay their road tax by direct debit in monthly, bi-annually or annually (a 5% surcharge for monthly and bi-annual payments will apply).
As the government push for lower and lower emissions with the announcement of each budget, manufacturers are going to have to keep up and make sure that their vehicles are as low as possible if they stand a chance of making it as a company car.
Either that, or the plug-ins and/or alternative fuelled vehicles will need to become more affordable and also more practical with a wider range of models available; the public will also have to adopt them as part of everyday motoring.