Yesterday’s Budget statement is 141 pages long, so it takes a while to go through the fine detail and dig out what’s immediately relevant to motorists. And what the Treasury may be making quiet preparations for in the next decade.
The most obvious upside is that fuel duty has been frozen again, though Insurance tax has been pushed up another 0.5% to a nice, round 10%.
Perhaps most welcome for many car enthusiasts will be the decision to make the VED exemption for classic cars a ‘rolling’ 40-year rule. The Chancellor says that from 1 April 2017, any car that turns 40 years old before 1 January in that year becomes exempt from VED and its future replacement road tax.
And as new cars become more fuel efficient - at least according to the controversial EU combined cycle calculations - the Treasury has been busy adjusting tax breaks.
For example, if your business buys a car in order to be able to write off 100% of its cost in the first 12 months, the car will - from April 2018 - have to be rated below 50g/km of CO2 in the EC cycle, down from this year’s 110g/km.
That example may apply to very few car purchases, but it gives a direction of travel for future car taxation. CO2 tax break levels will be pushed down markedly to stay ahead of the increasing fuel efficiency of modern cars.