Autumn Statement 2014

As usual we will have a prompt report on the Autumn Statement within an hour of the Chancellor sitting down in the House of Commons.

Budget - March 2014
Our prompt report of the key points for classic car enthusiasts. Report

Autumn Statement - December 2013
See our report. More

What is causing the fall in crude oil prices?
The OPEC group of oil producing countries(which supplies around a third of global crude oil production) recently met and no agreement on reducing crude oil output was agreed. So OPEC members are maintaining the current production rates so crude prices, like Brent crude at around US$70/barrel, are falling. Where is the crude oil price floor is a key question? At present the crude oil market is oversupplied to the extent of around 1m barrels a day and a major new source of shale oil from the US has become a key factor in the balance of supply and demand as many shale producers have the lowest cost production at around US$40 a barrel. Many oil producing countries in South America and elsewhere have economies that depend on foreign earnings from their oil exports and to maintain that income with falling crude prices export volumes have to be maintained or increased. Russia is also in that position and reports say that to maintain its crude oil earnings it really needs a crude price of over US$100, so clearly it will be suffering from the glut and consequent crude oil price fall.


FairFuel Campaign
The FairFuel campaign say "Government continues to take over 60% in tax when we fill up at the pumps, we have the highest Fuel Duty levels in the EU and the cost of fuel directly impacts adversely on the cost of living, investment, jobs and operating of businesses." Their aims are to "to stop any fuel duty rises in this Parliament and beyond, c
ut fuel duty by 3p for economic growth' ensure all Government taxes (fuel duty, VAT and VAT on fuel duty) are displayed on fuel receipts in detail, bring UK petrol and diesel prices to European parity in terms of fuel pricing and taxation, lobbying for a full blown independent inquiry into the fuel pricing process and oil price speculation, seeking an increase in tax incentives for the adoption of Greener fuels and technologies and a fight for a better deal for all of the 32m road users in the UK". All good stuff - maybe they should include encouraging apple pie makers too!
Latest pump prices
Pump price trends


Posted: 1401203

Autumn Statement on Wednesday 3rd December
The Autumn Statement 2014 was delivered in the House of Commons by the Chancellor of the Exchequer, George Osborne, on Wednesday 3rd December 2014.
The Statement provided an update on the Government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility. These forecasts are published alongside the Budget Statement. Full details of those announcementsare available on the HM Treasury website following the Chancellor's statement to Parliament but as usual we have a prompt report on the measures announced of interest to classic motoring enthusiasts. HM Treasury Autumn Statement 2014 document & HMRC announcements

The headlines for classic car enthusiasts in the Autumn Statement:
> Motor fuel duty frozen in 2015 - George Osborne said "despite falling fuel prices let me make this clear: we've cut fuel duty and we will keep it frozen."
< Road building to deal
with a number of bottlenecks on the A1 in the north and the A303 - the Government has committed £15 billion to improve the national road network. Green campaigners have railed against Chancellor George Osborne's Autumn Statement, slamming its "1980's-style road building programme and tax breaks for fossil fuel giants". Are there tax breaks for open-toed sandals!
> Motorway fuel price comparison signs – the government will install electronic signs showing fuel price comparisons on the M5 between Bristol and Exeter during 2015. (Para 2.240, p 90 HM Treasuury document.).

More on the Autumn Statement for classic car motoring?
Vehicle Excise Duty (VED)
In the Budgets 2013 and 2014
classic car enthusiasts saw very welcome news with VED exemption concessions, so now the concern for enthusiasts with cars built after 1974, which do not yet benefit from the exemption, is the VED rates and bands that apply to their classic car and daily cars.

VED rates and bands
The Budget Statement in March 2013 announced that from 1st April 2013 VED rates would increase in line with RPI, apart from VED rates for heavy goods vehicles (HGVs) which will be frozen in 2013-14. The Statement added the Government has no plans to make significant reforms to the structure of VED for cars and vans in this Parliament. So from 1st April 2014, VED rates are likely to continue to increase in line with the Retail Prices Index (RPI). According the previous announcements, the Government has shelved its plans to reform to the structure of VED bands for cars and vans in this Parliament. So the bands will remain. (Para: 2.146, page 83).
HM Treasury


VED exemption now a rolling concession
In the Budget 2014 in March, tucked away on page 76 of the support document released by HM Treasury shortly after the Chancellor sat down, was the welcome brief announcement "the Government will introduce a rolling 40 year VED exemption for classic vehicles from 1st April 2014". (Para 2.153, page 76).
That rolling VED exemption followed the earlier announcement in the support document issued by HM Treasury shortly after the Budget Statement made in March 2013 that the Government would extend the cut off date from which classic vehicles are exempt from VED by one year. So making it a rolling feature was very good news.

See our additional information on VED exemption.
VED exemption guide & flowchart & More

Abolishing the paper tax disc and payment of road tax by Direct Debit
These measures were confirmed as part of a simplification of VED administration and were introduced by DVLA in October 2014. See our NEWS reports. More & More

Fuel duty
In March 2014 the Chancellor confirmed the 2p fuel duty increase due in September 2014 would be frozen. This followed the announcement in the Autumn Statement 2013 that as well as scrapping that increase, George Osborne confirmed that no further rise would take place until at least May 2015 to ease the cost of motoring for the general public and UK business. To date, fuel duty has now been frozen for over four years, the longest duty freeze for over 20 years. Since their election in 2011, the Coalition has cancelled or delayed all the fuel duty rises that had been announced by the previous Labour administration.

However by scrapping all intended rises in duty over the last four years, the Treasury has sacrificed £22 billion of potential tax revenue; a loss which will have to be balanced by cuts elsewhere in the economy.

With falling motor fuel prices at filling stations, the tax take as a percentage of the price per litre has risen. There is pressure to reduce that percentage with a consequent reduction in the combined taxes and duty. With lower pump prices pleasing the motorist the likelihood of a reduction in either tax or duty on motor fuel seems slim.

Falling fuel prices
With the fall in crude oil prices motor fuel prices have been falling driven in many cases by supermarket filling stations - supermarkets are experiencing the most intense market battle for many years and attracting customers has become an essential need. Using low motor fuel prices is a tactic they use which is a benefit to the motorist as it puts pressure on leading petrol retailers to consider their fuel prices too and often reduce them. See our notes on these topics to the left alongside.

Pothole repair fund
Classic car enthusiasts have reported some heavy suspension crashes with the ever increasing pothole problem, so they welcomed the good news in the last Budget Statement that a £200m pothole repair fund was being established. This will mean councils will be able to bid for money to repair roads ravaged by the winter floods. The current estimate for repairs mentioned in the Budget 2014 was£400 million, on top of the £10.5 billion repair backlog that already exists. (Para 2.28, page 63)
Other issues of concern to classic car enthusiasts
VAT
An increase in the VAT rate is very unlikely and a reduction from the current 20% seems unlikely too.

Insurance tax
A change has not been suggested which might have an impact on classic car motor insurance policies. The standard rate of 6% (Jan 2011 - April 2012) remained at 6% for 2012-13 - see page B18 of the HMRC document.
Tax rates & allowances Annex B
V8 Register - MG Car Club - the leading group for MG V8 enthusiasts at www.v8register.net