The Budget 2016 from the motorists’ perspective
With warnings of storm clouds brewing on the global economic horizon, forecasters have, once again, admitted that they were a little over-optimistic about the state of the UK’s finances.
With speculators commenting that George Osbourne needs to raise funds, it is unsurprising that motoring groups have been cautious of drivers being used as cash-cows. Yet, it seems as though private car drivers have got off fairly lightly this year.
1. Fuel Duty. Despite there being no fuel duty rises, in nominal terms, since 2011 (the most recent rise, scheduled for September 2015, was scrapped) the collapse in oil prices has hit the Treasury hard. Nonetheless, with the majority of pump prices comprising of tax, raising fuel duty remains a political hot-potato. However, the Chancellor commented that drivers paid high taxes, when the prices were high, and should not be penalised when prices fell. In one of his biggest surprises, fuel duty will remain frozen for 2016, saving an average household £75 per year.
2. Insurance Premium Tax (IPT). Since IPT was raised by 3.5% last November, the Association of British Insurers has estimated that the average household has paid more than £100 in extra premiums. Obviously, this covers not only car insurance but also household, life, travel, pet and motor-breakdown policies. The Chancellor has announced another 0.5% increase, taking IPT to 10%. The extra 0.5% will provide £700 million for flood defence investment. We should be thankful. Predictors thought that another 3.5% increase was on the cards…
3. Car tax (VED). As before, VED will rise with inflation and the proposed changes for new cars will continue, as planned, in April 2017.
4. Roads infrastructure. Tolls on the Severn Crossing will be halved from 2018. Road infrastructure improvements have also been announced, including the M62 being widened to four lanes. There will also be a new tunnel road to link Manchester and Sheffield, plus further upgrades to the A66 and A69 in the North Pennines.
More details about how the Budget 2016 will affect motorists, in particular, will follow, when the small print is revealed.