Car tax up, fuel duty down a penny

Despite “Motoring costs should fall for families and businesses” [BBC] it wasn’t actually such a good day for motorists.  

The planned inflation rise in fuel duty due next month is to be delayed until next year and the annual 1p above inflation “fuel escalator” rise will be scrapped until 2015.  VAT on fuel will not be reduced, although fuel duty will be cut by a mere 1p per litre tonight.  This does little to tackle pump prices, up 20p/litre* for unleaded in the last 12 months.

Importantly my fears were valid (Taxing times) as Vehicle Excise Duty for cars is to be increased in line with RPI (5.5pc). This affects all cars emitting more than 120g/km.  Specifically, it will add £5 for vehicles emitting 121-150 g/km, £10 for 151-200 g/km, £15 for 201-225 g/km plus £20 and £25 for the top two bands respectively.  First year VED is also up for cars emitting over 130g/km, rising from £5 to £50 across the bands.  (129 g/km and below is still £0 for year one.)

Edmund King, AA president said of the 1p duty cut: ”this action has probably stopped a ‘summer of discontent’”.  I disagree: doing so little just perpetuates the pain felt by motorists who need their vehicles to reach places of work.  Even if the 1p reduction is reflected on the forecourts, it doesn’t redress the excessive recent hikes at the pumps.

*http://www.whatgas.com/petrol-prices/unleaded-prices.html





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