Budget
Statement on Wednesday 19th March
The Budget Statement 2014 made in the
House of Commons by the Chancellor of the Exchequer, George Osborne, on Wednesday
19th 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 those announcements are 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 which will be of interest for the classic motoring
enthusiast.
What did we see in the Budget Statement for classic car motoring?
VED
exemption now a rolling concession
This welcome news was tucked away on page 76 of the support document released
by HM Treasury shortly after the Chancellor sat down. The brief announcement is
"the Government will introduce a rolling 40 year VED exemption for classic
vehicles from 1st April 2014 (Para
2.153, page 76)
Adding
the rolling feature follows the announcement in the support document issued by
HM Treasury shortly after the Budget Statement in March 2013 that the Government
will extend the cut off date from which classic vehicles are exempt from VED by
one year. From 1st April 2014 a vehicle manufactured before 1st January 1974
will be exempt from paying VED. (Para 2.148, page 84)
See additional information
on VED exemption. More
Fuel duty
The Chancellor confirmed the 2p fuel duty increase due in September
2014 is to be frozen. This follows 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. That means compared with
the previous Government's plans, petrol is around 20p per litre less. That is
£11 less every time you fill up or, for a typical classic car use of say
5,000 miles a year, a saving of around £170. (Para
2.152, page 76)
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.
| VED
rates and bands
The VED rates and bands for cars, motorcycles and the
main rates for vans will increase by Retail Prices Index RPI from 1st April 2014
but no structural changes were announced. That is in line with the Autumn Statement
in 2013 when the Chancellor added the Government has no plans to make significant
reforms to the structure of VED for cars and vans in this Parliament. (Para:
2.152, page 76).
Abolishing
the paper tax disc and payment of road tax by Direct Debit
These measures
were confirmed - VED administrative simplification - and had been previously announced
in the Autumn Statement and are due to be introduced from 1st October 2014. (Para
2.154, page 76) More
Pothole
repair fund
Classic car enthusiasts have reported some heavy suspension
crashes with the ever increasing pothole problem, so they will welcome the good
news in today's Budget Statement that a £200m pothole repair fund is 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 is £400 million,
on top of the £10.5 billion repair backlog that already exists. (Para
2.28, page 63)
VAT - no change
No increase in the VAT rate was announced but equally
no reduction from the current 20% either.
Insurance tax
No
change which could have had an impact on classic car motor policies. The standard
rate of 6% (Jan 2011 - April 2012) remained at 6% for 2012-13 and continues for
2014-15. See page B18 of the HMRC document.
Tax
rates & allowances Annex B |
