How the 2013 UK budget will affect Vehicle owners

The annual UK budget is always a testing time especially with the economy the way it is presently. Chancellor George Osborn had announced this year that his annual budget would be aimed towards people who work hard. In his keynote speech, he had stated that the economy would not fall back into a recession and stressed the primary goal would be to get more people back into work and reduce the number of people claiming benefits. The budget was delivered this year with help for homebuyers, motorists and beer drinkers. So what does this year’s annual budget really mean for motorists? Here we outline some the key points: -

Fuel duty increases cancelled

The proposed fuel duty increase that had been scheduled for September was cancelled by George Osborne; this would have added 3p to the cost of petrol and diesel. Apparently motorists would have been forking out in excess of £1 billion in extra fuel duty and Vat should the fuel duty increase have gone through. Basically it means that petrol prices would have been 13p more expensive per litre had the duty not been frozen out over the last 2 years. For a Ford Focus, it could actually represent a saving of around £7 per full tank of petrol. For motorists, this has offered some relief as fuel duty has not gone up for the past 2 years since January 2011. The current economic climate has seen planned increases shelved for the last 2 years. Apparently the government has lost a total of £6 billion in revenues due to fuel duty being frozen for 2 years.

There has been widespread positivity towards the fuel duty freeze with consumer groups and UK industry bodies welcoming the news. There was an acknowledgment throughout that previous increases had harmed the economy. The RAC foundation also announced that this would bring much needed relief for families already burdened by the high costs associated to running a vehicle. The high cost of fuel has meant that members had reduced journey times, and cut general household expenditure due the continued high cost of fuel.

Tax Allowance

The budget also brought more relief for motorists with the chancellor announcing that there would be an extension to first year tax allowance. This would be for those who purchase ultra-low emission vehicles. The chancellor also announced the introduction of new company car tax rates for lowest emitting cars. The car tax rates will commence from April 2015 will be introduced at 0-50g/ km CO2 and 51-75g/km CO2.

SORN

Another budget announcement that will indeed affect vehicle owners is the SORN (Statutory Off Road Notification). Previously this would be renewed each year whilst your vehicle was off the road. Under the new budget, there will be no need for renewal.

Tax Disc Grace Period

Not having a task disc on your car would normally be regulated to 5 days before you would be legally liable. The chancellor announced that this would be extended to a period of 14 days.

Classic Cars

There was more budget news for those who have classic cars. Currently owners of classic cars do not have to tax it. The classic car exemption has now been forwarded a year meaning that any classic cars that were manufactured before the 1st January 1974 will now be exempt from tax obligations. There appears to be some positivity for motorists from this year’s budget though there are still those who feel it is not enough. Quentin Wilson from FairfuelUK feels that freezing annual fuel duty is just not enough. To stimulate current economic growth, the government really needs to do more by introducing substantial fuel cuts.