20/03/2013 14:30 | By motoringresearch.com

Budget 2013: what it means for the motorist

What the Chancellor’s 2013 Budget means for UK drivers

Chancellor of the Exchequer George Osborne (© Reuters)

Chancellor of the Exchequer George Osborne today announced the Government’s future plans for public finances.

With a significant portion of his statement surrounding motoring, we’ve put together what the 2013 Budget means for the motorist.

Keep returning throughout the day to receive updates and industry comment on how the 2013 Budget will affect drivers in the UK.

Budget 2013: has the Government scrapped the proposed fuel duty rise?

George Osborne has CANCELLED a rise in fuel duty worth around 3p per litre to Government coffers.

This makes petrol 13p per litre cheaper than it otherwise would have been and an average fill-up for a Ford Focus or Vauxhall Astra £7 cheaper per tank, according to the Chancellor.

Planned to come into force in autumn this year, with rising oil costs causing inflated prices at the pumps, Osborne has scrapped the increase for a minimum of two years.

Every fuel duty rise scheduled since 2010 has been abolished by the Coallition, so with fuel prices rising by close to 8p per litre in 2013 alone according to the AA, it’s not surprising the Chancellor has deferred it once more.

It’s a clear message from the Government and the most promising news to emerge from this year’s budget for UK drivers.

Budget 2013: has the Government altered road tax rates?

Road tax rates have been frozen as part of the 2013 Budget announcement. After a rise inline with inflation last year, it means Vehicle Excise Duty will only increase alongside the Retail Price Index from April.

It was thought that as manufacturers strive to make their vehicles more efficient and British motorists seem to adopt the trend of downsizing to more economical, smaller-engined vehicles, the current road tax rates could be altered to reflect this.

However, the Government has opted not to change the banding structure, keeping road tax constant despite a predicted £100 million a year shortfall from the financial year 2014-2015 as a result of declining income from the levy.

Budget 2013: have company car tax rates be adjusted?

Two new company car tax bands giving incentives for low and ultra-low CO2 emissions vehicles will be introduced from April 2015.

The new bands will cover the 0-50g/km CO2 emissions range i.e. hybrid and electric vehicles – and should help improve the take-up of alternatively fuelled fleet and company car vehicles.

Until 2015, company car tax rates will be dictated by Osborne’s 2012 budget. This confirmed changes to company car Benefit in Kind rates coming in to force in April this year and will see small increases in company car tax rates over the next three years.

Budget 2013: has the Government set aside any spending for road improvements?

An extra £3 billion annual infrastructure spending has been earmarked. However, the funds will not be released until 2015 – 2016 until other funding measures announced in Chancellor Osborne’s Budget will pay for it.

Budget 2013: has the Government announced any changes to insurance premium tax?

Both the lower and higher rate of insurance premium tax – 6% and 20% respectively, with the latter only applied to some vehicles – have not be altered as part of Budget 2013.

Budget 2013: how will the unchanged VAT rate affect car drivers?

The rate of Value Added Tax – or VAT – has remained at 20%. That means you won’t have to pay any more VAT on a litre of fuel or a new car purchase than before.

Motorists' charter: what drivers need and want from the 2013 budget
January 2013 fuel duty increase scrapped
AA: return of 'rip-off' fuel prices
Business wants tolls to improve roads

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