Budget 2017 – what it means for the motorist

Posted on November 22nd, 2017 by Rob Marshall

Amid forecasts of downgraded growth, the Chancellor of the Exchequer, Philip Hammond, insisted that he was reporting on an economy that continues to grow and confound the critics…

Yet, what did Budget 2017 hold for the typical motorist?

Electric Cars

The Chancellor asserted that the UK Government lauds the World’s technological revolution and wants to embrace the future. Despite inserting a joke about Jeremy Clarkson not liking them, Hammond sited driverless vehicles as a prominent symbol of modern, high-tech progress and he reaffirmed his commitment to them, by saying: “Our future cars will be driverless but they will be electric first.”

He also stated that the switch from conventional forms of fuel, “needs to come as soon as possible for our planet.”

Therefore, a £400m charging infrastructure fund was announced, with an extra £100m dedicated to plug-in car grants, plus £40m for charging R&D. The Chancellor announced that clarification would be made in tax law so that employees who charge their electric vehicles at work will not face a Benefit-In-Kind liability from next year.

Air Pollution

“We owe it to our children that the air they breathe is clean” was an obvious crowd-pleasing statement and diesel car running costs were expected to rise to finance the £220m clean air fund for cities and towns.

Sure enough, it has. We think. Starting from April 2018, the Chancellor said that VED (car tax) will go up on new diesel cars – although some commentators have led this to mean all diesel cars – therefore, we await the clarification. After all, the Government had made it clear that it did not intend to penalise owners of current diesel vehicles, who were incentivised to buy them by past administrations.

The first year VED for diesel cars “that do not meet the latest standards” will go up by one band from April 2018 and the existing diesel car supplement in company car tax will increase by 1%. Hammond also stated that drivers buying a new car will avoid this charge as soon as manufacturers bring out “the next generation of cleaner diesels” – but no further clarification was provided about what the statement means. Again, we need to see the small print to unravel the announcement.

Duties

Apart from a new rail card, offering discounts to 26-30 year olds, being introduced, Hammond reiterated an earlier promise of abolishing Severn Bridge tolls by the end of next year.

Finally, duties on petrol and diesel were frozen officially, by cancelling the scheduled April rise. However, it is worth noting that, because fuel retail costs are increasing, the Treasury is taking a larger tax slice anyway.