Report on the Budget 2016

Full details of the Budget announcements are available on the HM Treasury website released following the Chancellor's statement to Parliament.

Budget Statement 2016 document
from HM Treasury. More


Preview of the Budget 2016

See our preview. More


Posted: 160316 @ 13.55
Updated: 160327
Budget Statement on Wednesday 16th March
The Budget Statement 2016 made in the House of Commons by the Chancellor of the Exchequer, George Osborne, on Wednesday 16th March 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 the Budget 2016 announcements are available on the HM Treasury website following the Chancellor's statement to Parliament.

As usual we have this prompt report on the few measures announced which will be of interest to the classic motoring enthusiast.
It is released within an hour or so of the Chancellor sitting down in the House of Commons.

Good news for the classic car enthusiast
The fuel duty freeze was a welcome announcement as there were fears the Chancellor might have made an increase. The permanent measures for the VED classic vehicle exemption are reassuring. The insurance premium tax increase of 0.5% is less than might have been feared and its use for flood prevention is very welcome in areas which have suffered over recent months like Cumbria.

See the HM Treasury Budget 2016 document for full details - extracts from that document are screengrabbed into our document. More & Document
Headlines for classic car motoring

Fuel Duty continues to be frozen for the 6th year saving a typical driver £75pa if the freeze had not been extended another year. A typical driver spends £450pa less on motor fuel than they would do had the freeze on the Labour Party's fuel duty escalator not been introduced by the Conservative/Liberal Coalition in 2010 and continued by the present Conservative government. The continued freeze was a very welcome announcement. More

VED classic vehicle exemption - the Government will legislate to place the classic car vehicle VED exemption on a permanent basis from 1st April 2017 so that from 1st April each year vehicles constructed more than 40 years before the 1st January of that year will automatically be expempt from paying VED (Finance Bill 2016) Para 2.163 More

Vehicle Excise Duty rates and bands - from 1st April 2016 VED rates for cars, vans and motorcycles will increase by RPI (Finanec Bill 2016) Para 2.164 More

Insurance tax increased by 0.5% to 10% with the tax take used for UK flood defence spending.
More

Tolls on the Severn Crossing halved.

Road infrastructure upgrades to the A66 and A69 and a four lane upgrade for the M62.
More

Alcohol duties frozen on beer, whisky and cider.
More

Higher rate personal tax threshold raised from £42,385 to £45,000 in 2017-18.
More

Clamping down on claims management companies. More

National infrastructure commission proposals adopted. More

What did we see in the Autumn Statement 2015 for classic car motoring?

Fuel Duty

The government will cancel the RPI inflation Fuel Duty increase of 0.54 pence per litre scheduled for 1st September 2015. The effect is the fuel duty increase planned by the previous Labour government and due to apply from September 2015 has been cancelled. The aggregate saving for drivers is now around £10 per tank of fuel.

Vehicle Excise Duty rates and bands

From 1st April 2015 Vehicle Excise Duty (VED) rates for cars, vans, motorcycles and motorcycle trade licences will increase by RPI. (Finance Bill 2015)

Vehicle Excise Duty classic vehicle exemption
As announced at Budget 2014, from 1st April 2016 a vehicle manufactured before 1st January 1976 will be exempt from paying VED. (Finance Bill 2015)




Alcohol Duty rates
From 23rd March 2015, the duty rates on general beer, spirits and lower strength cider will be reduced by 2%. The duty rate on low strength beer will be reduced by 6% and the total duty rate on high strength beer will be reduced by 0.75%. The duty rate on high strength still cider will be reduced by 1.3% and the duty rates on wine below 22% abv and
high strength sparkling cider will be frozen. (Finance Bill 2015) (9,10)

Over the last four years we have seen fuel duty frozen and VED exemption reintroduced for classic car owners, both measures that have been a real benefit for classic car enthusiasts.

See our VED exemption guide and flowchart. More
Will the VED roll on as promised? More
What did we see in previous Budgets and Autumn Statements?
See our earlier reports and links to HM Treasury and HMRC webpages. More

Why does the Chancellor hold the "Red Box" up for photos as he leaves for the House of Commons on Budget day?
Seeing the red case on the news item reminds me of an article in a newspaper today which recounts how in 1868 George Ward Hunt, the chancellor in Disraeli's short lived government, went to the House of Commons but left his budget speech behind at home. Now chancellors lift the red box as they leave their "house" to show they haven't forgotten their speech.








Autumn Statement 2015
See our report on the announcements of interest to classic car motoring enthusiasts. More

Summer Budget 2015
See our report on the announcements of interest to classic car motoring enthusiasts. More

Budget 2015
See our report on the announcements of interest to classic car motoring enthusiasts. More

Autumn Statement 2014

See our report on the announcements of interest to classic car motoring enthusiasts. The Autumn Statement included very good news that the VED exemption was now a rolling 40 year concession. More

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.

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)
V8 Register - MG Car Club - the leading group for MG V8 enthusiasts at www.v8register.net