Budget 2008: What it means to you
Budget 2008: What it means to you
Author: Robin Brown
Published: 12 March 2008
High-polluting vehicles will be hit harder, but incentives for green cars will be introduced and fuel duty rises shelved, announced Chancellor Alistair Darling in his 2008 budget.
Fuel duty
Lobbying from consumer and freight organisations, as well as record increases in oil prices, have convinced Chancellor Alistair Darling to delay planned fuel duty rises by six months.
A rise of 2p per litre had been planned, but pressure from lobby groups and consumer unrest at the high cost of motoring has led to Darling shelving the plans.
But fuel duty will rise by 0.5p per litre in real terms in 2010, warned the Chancellor.
Road tax
Road tax will be regraded to encompass bands from A-M, to punish those who buy the most polluting vehicles and encourage manufacturers to drive down emissions from their cars.
On top of the highest rates will be a so-called 'showroom tax' that will mean high polluters will pay an even higher rate for the first year.
Cars emitting more than 255gkm would be subject to the highest rate - paying up to £950 in the first year.
From 2009-10 VED for all cars emitting under 150g/km of CO2 will be reduced, while the standard rate of VED on the most polluting cars will be upped to £425. From 2010-11 all cars emitting less than 130g/km of CO2 will be exempt from road tax.
Currently a Band G vehicle that emits more than 225g/km pays £300 per year, rising to £400 per year next month.
At the moment alternative-fuel cars receive a discount on VED - this will change in 2011 when all fuel types will be taxed at the same rate.
'It is right that if people choose to buy a more polluting car that they should pay more in the first year to reflect the environmental cost,' Darling said.
See below for the new rates of road tax introduced today.
Company car tax
Capital allowances for business cars will be reformed to incentivise companies to encourage their employees into lower-emission cars. The business fleet accounts for around two-thirds of total car sales.
From 5 April 2010 the lower threshold for the 15 per cent Capital Car Tax band will be lowered from 135g to 130g/km.
Leasing
From April 2009, cars with CO2 emissions over 160g/km there will be a 15% disallowance relating to finance payments. For cars emitting 160g/km or under there will be no disallowance. This replaces the current system of disallowance for cars costing more than £12,000.
Biofuels
Darling announced that money will be set aside to develop road-pricing schemes and - as expected - announced that biofuels will not be subsidised from 2010, saving the Treasury over £500m a year.
Darling has scrapped the tax break on biofuels due to environmental concerns about the sustainability of biofuel crops. Instead the government will press ahead with existing plans to require petrol and diesel to include 5 per cent biofuel by 2010.
CNG and LPG
Duty rates discounts for Compressed Natural Gas (CNG) will remain, whilst for Liquid Petroleum Gas (LPG) the discount is to be cut by 1%, both taking effect from 1st October 2008.
Other measures
It is believed that global economic pressures have delayed plans to introduce harsher green taxes on high-polluting vehicles.
Announcements on a showroom tax on so-called gas-guzzlers of up to £1,000 and laws that would force oil companies to develop more sustainable biofuels were not announced.
A report published alongside the budget called for -whole-life running costs of cars to displayed on new cars and clearer environmental information on advertising provided by manufacturers to indicate the relative greenness of their cars.
New road tax rates
Annual VED rates current-2009
Band A (up to 100g/km) - no fee
Band B (101 to 120g/km) - £35
Band C (121150g/km) - £120
Band D (151165g/km) - £145
Band E (166185g/km) - £170
Band F (186225g/km) - £210
Band G (greater than 225g/km) - £400
Annual VED Rates in 2009-10
Band A (up to 100g/km - no fee
Band B (101-110g/km) - £20
Band C (111-120g/km) - £30
Band D (121-130g/km) - £90
Band E (131-140g/km) -£110
Band F (141- 150g/km) - £120
Band G (151 to 160g/km) - £150
Band H (161 to 170g/km) - £175
Band I (171 to 180g/km) - £205
Band J (181 to 200g/km) - £260
Band K (201 to 225g/km) - £300
Band L (226 to 255g/km) - £415
Band M (Over 255g/km) - £440
Annual VED Rates in 2010-11
Band A (up to 100g/km CO2) - no fee
Band B (101-110g/km CO2 - £20
Band C (111-120g/km CO2 - £35
Band D (121-130g/km CO2 - £95
Band E (131-140g/km CO2) - £115
Band F (141- 150g/km CO2) - £125
Band G (151 to 160g/km CO2) - £155
Band H (161 to 170g/km CO2) - £180
Band I (171 to 180g/km CO2) - £210
Band J (181 to 200g/km CO2) - £270
Band K (201 to 225g/km CO2) - £310
Band L (226 to 255g/km CO2) - £430
Band M (Over 255g/km CO2) - £455
Annual VED rates for new cars bought in 2010-11, including showroom tax
First-year VED Rates in 2010-11
Band A (up to 100g/km CO2) - no fee
Band B (101-110g/km CO2) - no fee
Band C (111-120g/km CO2) - no fee
Band D (121-130g/km CO2) - no fee
Band E (131-140g/km CO2) - £115
Band F (141- 150g/km CO2) - £125
Band G (151 to 160g/km CO2) - £155
Band H (161 to 170g/km CO2) - £250
Band I (171 to 180g/km CO2) - £300
Band J (181 to 200g/km CO2) - £425
Band K (201 to 225g/km CO2) - £550
Band L (226 to 255g/km CO2) - £750
Band M (Over 255g/km CO2) - £950
Send in your motoring queries on the 2008 budget on the form below.
Click here for more Business and Industry stories
Click here for more Motoring costs stories
Road tax and fuel duty increases likely, £1K 'showroom tax' on gas guzzlers and advice for car buyers on financial sense of going green expected in Alistair Darling's budget.
With climate change awareness growing and governments determined to cut CO2 emissions from transport, the hunt is on for greener cars. Our rundown presents the least polluting vehicles by emissions.
Around 400 people a day risk damaging their car by misfuelling, and filling up with gas is a mistake that could cost thousands. So what do you do if you΄ve filled up your diesel car with unleaded petrol?
We have all seen the Bugatti Veyron by now. Do you want one? Then you have to sign a contract with the company which - quite frankly - is rather absurd.
Top Gear plaudits for former dunce of the car world highlights remarkable turnaround in fortune for Skoda.
cannot seem to find anywhere what will happen to the cars whcih are pre 2001 ! Are they still exempt as no one really knows what their emissions are?
Steve: http://motortorque.askaprice.com/news/auto-0805/older-cars-will-pay-top-rate-of-road-tax.asp
advertisement
Nissan will sell a new special edition of its new 370Z coupe in the shape of the 370X Yellow. It's yellow. | 03/07/2009
Ford says it has taken over 12,000 order in the UK under the government's scrappage scheme, and is currently receiving 300 new orders a day under the trade-in scheme. | 03/07/2009
Right cars, right time, at the right price is how Fiat sees the UK market conditions and the introduction of the 500C convertible. | 03/07/2009
Chic must-have styling, easy on the eye and easy-to-use electrically operated convertible roof. Its an open and shut case the Fiat 500C has a sunny future. | 03/07/2009
The Alfa Romeo 8C Spider will be blasting up the hillclimb at the Goodwood Festival of Speed this weekend, as Alfa prepares for its centenary year. | 02/07/2009
|30/06/2009
The UK Government scrappage incentive should not be extended despite the additional registrations it has brought, says Fiat.
|30/06/2009
All in all the new Toyota Verso is a sound and safe buy. Well equipped from the bottom model up, the Verso may not be exciting but it is fit-for-purpose and after all it is a Toyota.
|30/06/2009
Mazda has refreshed the MX-5 roadster and roadster coupe for 2009 - the 20th anniversary of the car hitting the market.
|01/07/2009
Motorists driving without wearing their seatbelt will be fined £60, while motorists driving without legal plates will also be hit with a stiff fine.
|02/07/2009
The Alfa Romeo 8C Spider will be blasting up the hillclimb at the Goodwood Festival of Speed this weekend, as Alfa prepares for its centenary year.
|20/11/2007
Around 400 people a day risk damaging their car by misfuelling, and filling up with gas is a mistake that could cost thousands. So what do you do if you΄ve filled up your diesel car with unleaded petrol?
|01/10/2008
Euro Car Parts has acquired Pinco 1555 Ltd, including all 53 of LSUK's 53 branches, together with subsidiaries M I Diesel Products, Protech Automotive (UK) and Yeovil Rewind.
|19/09/2008
20 of the best 90's TV car adverts showcase an industry wising up to the buying power of women, and putting the battle of the sexes at the forefront of car commercials.
|13/11/2007
German sports car manufacturer marches on as it post a monster 5.85bn profit.
|06/12/2007
Fuel protests similar to those that brought the UK to a halt in 2000 are being planned by a breakaway group of disaffected hauliers, according to press reports.
Search Motortorque:
yet again the government are raping the motorist. They never miss has an oppotunity to increase road tax or petrolduty. it wasintersting to hear that government ministers are refusing to use smaller greener cars in preference to the 37 jaguars they in the ministereal pool. It is always a case of do as we say, not as we do.