Budget
Statement on Wednesday 19th March
The Budget Statement 2014 will be made
in the House of Commons by the Chancellor of the Exchequer, George Osborne, later
this week on Wednesday 19th March. The
Statement provides 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
will be available on the HM Treasury website
following the Chancellor's statement to Parliament but as usual we will have a
prompt report on the measures announced which will be of interest for the classic
motoring enthusiast.
What
might we expect to see in the Budget Statement for classic car motoring?
Fuel
duty
In the Autumn Statement 2013, as well as scrapping the 2p per litre
increase that was due in September 2014, 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 will 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.
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
exemption for cars built in 1973
In the support document issued by HM
Treasury shortly after the Budget Statement in March 2013 an announcement tucked
away on page 84 provided the very welcome news 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) HM
Treasury
See additional information on VED exemption. More
VED rates and bands
The Budget Statement in March 2013 announced
that from 1st April 2013 VED rates will increase in line with RPI, apart from
VED rates for heavy goods vehicles (HGVs) which will be frozen in 2013-14. The
Statement added the Government has no plans to make significant reforms to the
structure of VED for cars and vans in this Parliament. So from 1st April 2014,
VED rates are likely to continue to increase in line with the Retail Prices Index
(RPI). According the previous announcements, the Government has shelved its
plans to reform to the structure of VED bands for cars and vans in this Parliament.
So the bands will remain. (Para: 2.146, page 83).
HM Treasury
Abolishing
the paper tax disc and payment of road tax by Direct Debit
These measures
were announced in the Autumn Statement and are due to be introduced from 1st October
2014. More
VAT - no change
An increase in the VAT rate is very unlikely and
a reduction from the current 20% seems unlikely too.
Insurance tax
A change has not been suggested which might have an impact on classic car motor
policies. The standard rate of 6% (Jan 2011 - April 2012) remained at 6% for 2012-13
- see page B18 of the HMRC document.
Tax
rates & allowances Annex B |
