Autumn Statement 2016 – how it affects motorists

Posted on November 24th, 2016 by Rob Marshall

GEM Motoring Assist


Nobody can deny the considerable political changes that have spilled over the news pages during the past five months. With George Osbourne out of Number 11, making way for Philip Hammond, all eyes have focussed on the new Chancellor of the Exchequer during his first (and last) Autumn Statement that was announced yesterday afternoon.

However, the devil is in the detail and we wait to hear the further finer minutiae, as they become available. From a motoring standpoint, here are the salient points:

  • Fuel duty – The sensitive issue was raised at PMQs by Charlie Elphicke, just prior to the Autumn Statement. He commented to Theresa May, “Fuel prices go up like a rocket, when the oil price rises, but fall like a feather when it goes down”. Philip Hammond confirmed later that oil prices have risen by 60% since January and this, coupled with the fall of Sterling against the US Dollar, prompted him to cancel a fuel duty rise for the seventh successive year. It was announced that this will save the average car driver £130 per year and a typical van driver, £350. No VAT cut on road fuel was announced, to help reduce the strain of the higher pump prices, however.
  • UK Insurance Premium Tax has risen considerably in recent years. Yet, Philip Hammond has increased it again from 10% to 12%, taking effect from June, stating that other countries’ insurance tax rates are higher.
  • In relation to road safety, rule changes will be made to target fraudulent whiplash claims that should save an average of £40 from a typical car insurance policy. However, critics argue that this could affect genuine personal injury claims and it will be interesting whether, or not, many insurance companies will push premiums up, anyway.
  • Road/transport investments – As part of his wider announcements on investing in infrastructure, Philip Hammond cited that “Reliable transport networks are essential to growth and productivity.” As part of this, he accounted a £1.1bn investment in English local transport networks, to help reduce congestion, plus £390m to advance low emissions and connected/autonomous vehicles, as well as fuelling growth in an electrical vehicle charging infrastructure.
  • Salary Sacrifice on Benefits In Kind; from April 2017, employers and employees will lose the tax advantages. Yet, ultra-low emissions cars and Cycle To Work schemes will be excluded, until April 2021.
  • VED – Nothing was announced about the car tax bands that will affect new cars from April 2017. Therefore, it is expected that the new rates will take effect from next year, as planned.

With that, the Autumn Statement was abolished.