Tucked away in the budget report...
The 2008 Pre-Budget Report set out reforms to vehicle excise duty (VED) for cars
registered from 1 March 2001 onwards, to incentivise the purchase and manufacture of lowercarbon
cars. Budget 2009 confirms these reforms, which include:
?from May 2009, an increase in the number of VED bands from seven to
thirteen. This will provide a greater incentive for drivers to choose a lowercarbon
version of car within their preferred class;
?from April 2010, the Government will further separate out the thirteen different
bands, in order to strengthen the environmental signal; and
?from April 2010, differential First-Year Rates of VED for new vehicles will be
introduced. These will provide a stronger signal to consumers at the point of
purchase.
7.53 To ensure that new VED rates and bands are clearly understood by motorists, the
Department for Transport has worked with the Low Carbon Vehicle Partnership to update the
fuel economy label for new vehicles, and is continuing to work with industry to develop a fuel
economy label for the second-hand car market.
7.54 Budget 2009 also announces changes to the VED rules on refunds, six-month
licences and imported vehicles during the first year of vehicle licensing, from April 2010,
as a consequence of the introduction of First-Year Rates, as well as general changes to the
treatment of imported vehicles. Details are set out in Chapter A.
7.55 Company car tax (CCT) was reformed in 2002 and is now based on carbon emissions,
encouraging the take-up of more fuel-efficient cars in company fleets. In recognition of
advancing vehicle technologies, Budget 2009 announces that, with effect from 6 April 2011:
?the basic threshold for the 15 per cent band of CCT will be reduced by 5g CO2
per km, so that this band applies to cars emitting between 121 and 129g CO2
per km. The percentage of list price subject to tax will continue to increase
by 1 percentage point with every 5g per km increase in CO2 emissions, to a
maximum of 35 per cent;
?the cap on car list prices used to calculate the taxable benefit arising from
company cars will be abolished, so that drivers of expensive cars will be
subject to a fair level of tax
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Yep, bad news for company car drivers, and more Fear, Uncertainly and Doubt on VED bands, again. More than 13 bands?
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Yes, mine is a 2004 registered car and I have absolutely no idea how much the tax will cost (287g/km). There was talk of it avoiding the eye watering top band but was that just temporary?
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Can't tell. I'm looking for somewhere in this budget where there is a hint of what's to come, but so far I've found nothing. Just an implication that 200-250g/km + is likely to be hit harder than we thought, at a guess.
No ideas if it will be retrospective or not.
Edited by TheOilBurner on 22/04/2009 at 15:54
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Found the details...
Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006 will fall into band K
Band K for 2009/2010 £215
Band K for 2010/2011 £245
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That's for the current 13 band system though, not sure what will come after that because there doesn't appear to be any details yet, only this ominous statement:
"from April 2010, the Government will further separate out the thirteen different
bands, in order to strengthen the environmental signal"
So those 2010-11 figures may or may not be verbatim yet. And what comes after is anyone's guess.
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They are verbatum, I just got them from the full budget report. What is unclear is that if these cars will remain in Band K after 2011
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Maybe, it implies that the new bands to be announced in April 2010 will apply from April 2011, but doesn't say so explicitly.
How much my high emitting car will be worth by then, well peanuts probably!
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It's all in Table A8a in Chapter A of the Budget report. PDF on BBC news site
tinyurl.com/cqrzpn
It's better news for VED than was on the cards 12 months ago. Agreed what happens after 10/11 is anyone's guess. Maybe the 13 band division will come in 11/12?
tiny url link fixed. HJ.
Edited by Honestjohn on 22/04/2009 at 20:24
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sorry the above link does not work.
Regarding the budget, what does 'indexation' mean ?
This is regarding the 1% increase in fuel.
"Fuel duty to rise 2p per litre from September and then by 1p a litre above indexation each April for the next four years."
Does this mean that if inflation rose 3% then fuel would go up by an extra 1% (4% in total) or have I misunderstood this ?
Edited by diddy1234 on 22/04/2009 at 16:09
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Spot on. +1% over inflation.
What happens if inflation becomes -2% deflation is unclear!!
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Sorry about the link. Maybe a mod will delete it?
If inflation is 0% then the increase is limited to 1p per litre, I guess.
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Sorry about the link. Maybe a mod will delete it? >>
Mods need only amend it - the url is fine, it is the extra "." at the end which is the problem. ["perod" or "fullstop"]
Copy and paste the link in your address bar and delete the full stop to make it work.
(Thanks jbif. Useful link now fixed. HJ.)
If inflation is 0% then the increase is limited to 1p per litre I guess. >>
Correct. The increase is indexation in % terms rounded up to nearest 1p, plus 1p per litre in absolute terms.
e.g.
Say if current duty is 50p per litre, then with a 2% indexation it would work as follows
[50p + 2% = 51p] + 1p/litre = 51p + 1p = 52p new duty
Edited by Honestjohn on 22/04/2009 at 20:27
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will have to sit down tonight and try and ingest what the future holds
as i read it here are they giving new car owners a specific tax for the first year or is it just that dealers will have to do powerpoint demonstrations as to why they should downsize on their moded transport
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There is very little new on VED. All the bands and amounts were announced in the pre-budget report.
They have been announced up to April 2011 after which it is an open book.
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So it's 3 fuel price increases in a 12 months now.
Sept 2p plus vat
Jan 1st 2010 - 2.5% vat increase
Ap 1st 2010 - 1p or more plus Vat at 17.5%
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This would all be more logical if each car was banded according to its ACTUAL emissions, not just what each manufacturer claims. How many cars are as clean at (say) 3 years old as they were when new?
Of course that idea is totally impracticable ...
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Bring on some more fuel protests like in 2000! I'd like to see that happen but for much longer. Maybe that would send a strong enough message to these idiots that we're no longer going to allow them to rape us!
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As the USA and other major countries pull out of the recession ahead of us, Oil will no doubt be back at $80 plus dollars a barrel by Sept. What price pet / derv then when the 2p plus vat comes along. ?
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LPG going to catch up with petrol/diesel duties a bit also - extra chunk this year then a penny/litre above unleaded's rises for next 3.
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A wonderful fuel, great for the environment, virtually no nasty pollutants.... tell you what, we'll introduce a grant " The Power Shift " grant to help people cover the cost of conversion. So sang a Labour toady back in their early days of office.
The grant was quickly snapped up and ran dry around 2 years earlier than expected. Then, 4 years ago, Brown , as tax collector , suddenly decided that LPG was in fact dirty and nasty and that the duty differential should be decreased by mucking about with the rise each budget.
They just make the rules up as they go along. It was either clean or it wasn't.
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That's why they should do away with VED.
They should just charge an annual admin fee for re-registering the vehicle and put the tax on fuel duty, as that is directly proportional to CO2 emissions which they are using as the excuse for those bands/taxes.
In my opinion, it's one of the biggest hoaxes played on and by mankind.
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No more fuel protests PLEASE!!!!! There is no point in a selfish minority with a private agenda messing up every motorist in the country. The rules are brought in by politicians so go and picket the House of Commons and the Minister's Car Pool. Give them the grief, not those of us who want, or have, to use the roads to make a living
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That's why they should do away with VED. They should just charge an annual admin fee for re-registering the vehicle and put the tax on fuel duty
And what would the annual "Admin" fee settle at? Probably a fiver to begin with, then as future chancellors needed more milk from the cow to pay for their own incompetence the "Admin" fee would be increased "For environmental reasons" until it was the same as the abolished VED.
Of course, the increased duty on fuel would still remain.
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You should have heard some transport bloke on the radio today... "We don't care what happens to fuel duty for cars, that's their problem, they can use public transport or something, but we want special rates for transport companies".
I had a huge amount of sympathy for transport companies with the crippling fuel prices - not so much now!
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......we want special rates for transport companies
This has been the public stance of many hauliers in recent years. A surefire way to blow any support from the public before they even start.
This kind of attitude is typical of the selfish, individualistic British mentality that ensures we get trampled on by everyone. It just doesn't occur to us to unite and fight together. Instead we squabble, dither and look out for ourselves, while the opposition divides and conquers. Pathetic.
The French are the true experts. Say what you like about their militant outlook, it gets results.
Cheers
DP
Edited by DP on 22/04/2009 at 21:44
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"This has been the public stance of many hauliers in recent years"
- I would say more the stance of their unions which are part and parcel of the Labour regime, and I would say haulage industry trade bodies have leaders working under the umbrella of the Common Purpose organisation, so the same applies.
Edited by Hamsafar on 22/04/2009 at 22:30
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Anyone used the BBC Budget calculator? According to that I'm going to be worse off in terms of fuel (well duh) but better off in terms of tax, so over the year we'll about £200 up, which is a plus.
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Anyone used the BBC Budget calculator? According to that I'm going to be worse off in terms of fuel (well duh) but better off in terms of tax so over the year we'll about £200 up which is a plus.
Same for me too.
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Beware with the BBC calculator, the VED rates for my car are wrong. It doesnt take into account cars which are banded in Band K registered between 01 and 06.
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£200 up! I only manage about £15 up because I smoke and drink...........
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Same here. According to the BBC calculator my VED for both cars in the household should be £115 in total. In fact it's £430.
I wouldn't trust that calculator much at all.
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I will be some how about £250 a year better of.
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maybe its the chancellors calculator that got left on a train somewhere and a recycling person decided it could be reused by the bbc
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Of course the Labour supporting BBC's calculator will put you in nice , happy position. Thats it's job.
2p a litre plus vat in a busy City like Manchester will annoying at a supermarket selling fuel at 95p a lt. In the middle of the Welsh countryside, it will be horrendous as it's likely fuel is already up to 10p a lt dearer.
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Don't blame the BBC
The calculator was designed by KPMG, the famous accountancy firm.
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For me the calculator shows a big red -£350 for National Insurance, but an even bigger green £700 for Income tax. Couldn't see anything in the BBC report to explain this - what have I missed?
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The amount of income tax you pay goes down each year (unless your earnings go up) due to the increase in the personal allowances. Note that the personal allowances never seem to go up in line with inflation, so it is in fact a sneaky way of putting up taxes that no one ever notices.
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The amount of income tax you pay goes down each year
Thanks - but does it go down enough to explain an extra £700 over the year? Or put it another way, assuming it does, what does that imply my earnings are? (Sorry, finance isn't my strong point.)
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All so complicated, got me baffled. Fact is we will pay what they demand and millions will carry on paying no tax or insurance and our authorities seem inept at catching them.
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My increase in fuel tax will be almost exactly offset by my decrease in income tax, and the £5 increase in VED is of no consequence. So I'll be better off by the amount of the increase of my state pension. I'm well pleased.
Edited by L'escargot on 24/04/2009 at 08:09
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A broader view of the wretched situation this year's budget places motorists in is afforded by an online article from The Telegraph (possibly printed in today's paper?)
"According to calculations by the RAC, the country's drivers will contribute an extra £600 million to the Treasury this year - 59 per cent of the additional revenue that the Chancellor estimates will be generated by the Budget."
This really does look like treating the motorist as a cash cow, especially when you read in the press that many of those caught by the 50% tax rate will find ways of avoiding paying. (I'm no tax expert and haven't a clue whether this claim is true.)
www.telegraph.co.uk/finance/personalfinance/how-bu...l
The article shows some nasty surprises in the detail of the budget.
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So, more VED rises for cars registered post 2001 come 2010?
And, a scrappage scheme for cars over 10 years old?
I think this is what is called joined-up thinking. But I'm not falling for it!
Keep yer old bangers!!
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Tucked away in the budget report...
7.53 To ensure that new VED rates and bands are clearly understood by motorists the Department for Transport has worked with the Low Carbon Vehicle Partnership to update the fuel economy label for new vehicles and is continuing to work with industry to develop a fuel economy label for the second-hand car market.
That is the problem with this government - they cannot just say "Put an A4 sheet of parer on the screen with the three MPG figures on it - they have to pay fewes to lots of people to sit on committe to discuss how they should do it . . .
Reminds me of the line in council meeting to discuss a new streetlight in the Goons' "the Evils of Bushy Spon" - it may be from Eccles.
"Lets get to the important issue - What colour will it be?"
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