What George Osborne's 2013 budget means for motorists

George Osborne has announced that the 3p per litre rise in fuel duty, scheduled for September, will be scrapped.

The Government has also extended the cut-off date for road tax exemption, for classic cars, by one year. From 1 April 2014 vehicles manufactured before 1 January 1974 will be exempt from paying road tax.

In order to reduce administration costs, SORN - Statutory Off Road Notifications - will now last indefinitely and not require renewing every year. The grace period for not displaying a tax disc, once you have paid for it, has additionally been extended to 14 days. 

There's good news for company car drivers too. Benefit-in-Kind tax will be 5 per cent of the P11D value of electric vehicles, from April 2015, instead of the 13 per cent previously announced.

The planned increase in fuel duty would have further pushed up the continually escalating cost of motoring.

Fuel for an average diesel car, travelling 10,000 miles a year and returning 40mpg, currently costs approximately £1,645 a year.

If the fuel duty rise had come in to play, that figure would have risen to £1,679. Motorists would have consequently had to pay an additional £34 a year.

The abolishment of the plan means that fuel duty will have been frozen for around three and a half years. The Government stated that "Pump prices are 13p per litre lower from April 2013 than under previously announced plans."

Chancellor George Osborne thanked Harlow MP, Robert Halfon, for campaigning to abolish the fuel duty escalator.

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Comments
11

20 March 2013

Prices broke £1.50/litre locally for Shell Optimax this week so I'm fairly pleased the duty is staying put...... for now. Been suprised there hasn't been more noise made about the general increases in forecourt price hikes in the last month.

20 March 2013

I think it is a crying shame that for enthusiasts like me in the last 50 years fuel costs have become such an issue that most of the cars are diesel.Good though it is in many respects it is really not the choice for any high performance engine,and great cars with V8 power are not only too expensive for most people to buy,they are prohibitive to run.There is hope though with amazing new turbo 4's like the AMG M133 in the A45 and CLA45,so all is not lost.

Madmac

20 March 2013

madmac wrote:

I think it is a crying shame that for enthusiasts like me in the last 50 years fuel costs have become such an issue that most of the cars are diesel.

I've less than half of your experience driving and owning cars but I also don't like the fact that such a large number of people are taking up to the diesel cars to keep their running costs in check.

20 March 2013

fadyady wrote:

madmac wrote:

I think it is a crying shame that for enthusiasts like me in the last 50 years fuel costs have become such an issue that most of the cars are diesel.

I've less than half of your experience driving and owning cars but I also don't like the fact that such a large number of people are taking up to the diesel cars to keep their running costs in check.

Don't forget that to most people driving is a way of getting from home to work / pleasure destination / hellish trip into to town to do shopping with the missus and not a pleasure in itself.  That means if diesel has been the best way to keep their costs down (MPG and CO2 based tax) then that is what they will do.  It also helps explain how people with a decent budget and choice (company car drivers of a certain executive status) defected from excellent driving BMW's to crappy driving Audi's because of their VW diesel engines ... thank God with the new A3 and A1 Audi are making cars that are good to drive as well.

20 March 2013

madmac wrote:

I think it is a crying shame that for enthusiasts like me in the last 50 years fuel costs have become such an issue that most of the cars are diesel.Good though it is in many respects it is really not the choice for any high performance engine,and great cars with V8 power are not only too expensive for most people to buy,they are prohibitive to run..

I really cant see how people who buy new cars get so upset at fuel costs. & years ago i bought a Monaro and suspect its averaged around 23mpg over 50,000 miles. At todats fuel prices thats around £14,000 in petrol. A diesel 320 (that would have cost at least as much to buy) would have cost around £8,000 to fuel. So the delight of driving a V8 petrol manual over a 2.0 diesel is £6,000. Over 50,000 miles! And dont forget depreciation. Both cars would have lost around £20,000 over that time. It makes the extra for the fuel look very little. A well specced 330 would have cost a lot more than £6,000 extra, and used nearly as much fuel.

I can see how high fuel prices effect those who run cheep second hand cars, but for people who buy new the cost of fuel is not really relavant compared to depreciation unless you drive a huge distance.

 

On a seperate issue, its great to see the changes regarding SORN, and also the change to classic car taxation. Labour stopping the exemption rolling forward was a mean spiritted thing all those years ago. Hopefully it will one day be restored to applying to all cars once they get to 25 as was originally the case, rather than 40 as will apply now. 

 

 

20 March 2013

It varies by more than 3p from garage to garage or if you have a Tesco voucher or whatever, wake me up when they take 30p off.

Not that it affects me but the SORN change is a sensible thing. If someone wants to keep a long term project car in their own garage its none of the governments perpetual business to have to keep telling them so. 

20 March 2013

I was pleasantly surprised to see this make a return to the agenda after so many internet rumours have been about the demise of classic car exemption in its entirity.

 

Is this now part of a plan to re-introduce a 40 year rolling exemption? And does Autocar have any insight in to why this was changed?

20 March 2013

@Artill - some interesting comments.

In the last 4 years, diesel cost has soared by around 45% in my area, so people may be justified in complaining at the increased cost of their motoring. 

In April last year I paid £1.50 a litre. In the last 6 months, I have paid as little as £1.25 per litre diesel (with discounts) to a maximum of £1.47 (no discounts), so in that context things may not be too bad at the moment. 

I tend to agree that those prepared to go out and buy a new car would need to recognise that depreciation is their main enemy, not the fuel price increases, and therefore not to bleat about fuel too much.  Placing a further perspective on matters, I recently had a cam belt and water pump change done and if I spent the same money on fuel, I could travel 4,000 miles at current prices with my car, a third of my annual mileage.

As it happens, my motivator for buying diesel was not the economy, it was the effortless torque, allowing a style of driving that suits me well.  The economy came as a welcome bonus.

20 March 2013

Hopefully the classic car exeption will increase year on year.

 

 

21 March 2013

Have been lurking for years and reading Autocar for 50 years+  but just recently signed up and nice to have such decent feedback and discourse with obvious fellow enthusiasts close to one's own heart,though sure in the future will have  a few differences of opinion,but thank you all !!

Madmac

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