Britain’s motorists escaped significant tax hikes in today’s Pre-Budget Report.
An additional 2p per litre fuel duty will be imposed from 1 December. But VAT will be reduced by 2.5 per cent to 15 per cent until the end of 2009, so fuel prices should remain unchanged.
The Government claims that new Vehicle Excise Duty (VED) bands (which run from A to M) will mean that ‘no driver in any given band will pay more than £5 extra in 2009’.
However, the Government reversed the most controversial planned VED change, which would have seen larger-engined cars registered after March 2001 being hit with a huge hike in road tax.
Under the new plans, cars emitting over 225g/km and registered between 1 March 2001 and 23 March 2006 will now be placed in band K. A tax disc purchased in 2009-2010 will cost £215, rising to £245 in 2010-11.
Plans to seriously hike road tax for cars emitting more than 166g/km from April 2010 remain in place.