With the Spring Budget now in full swing, we’ve seen a few of the changes first announced in March come into effect. Numerous changes in this year’s Budget have impacted motorists, with alterations across road tax, levy charges for lorry drivers, updates on fuel duty, and even changes across capital allowances.
Many of these modifications have clearly been inspired by the cost-of-living crisis that’s currently happening in the UK, with the idea being to alleviate some of the pressure off those struggling to balance their finances while owning a car or running a business.
Whether you’re a businessperson running a vehicle fleet, or an everyday car owner, this post will run through the most relevant updates to you in this year’s Budget.
Drumroll, please. Unfortunately, vehicle excise duty (VED) has officially increased starting from April 2023.
Vehicle tax rates have increased by roughly 9% across the board. The reason for this is to better align with the latest inflation statistics over the past 12 months, which currently sit at around 8.9% year-on-year.
For cars utilising the new tax system (those bought on or after April 2017), the first-year road tax range has increased by £240 (£2,365 - £2,605), whereas the usual rate is rising by £15 (£165 - £180). For premium cars costing more than £40,000, tax has also increased by £15 (£355 - £370). Thankfully, fully electric cars are still exempt from paying tax (phew).
For cars on the previous tax system (those bought between March 2001 and April 2017), the tax range has increased by £65 (£630 - £695), whereas older cars registered before March 2001 have had their tax increased by £20 for engines below 1549cc, and £30 for those above.
It’s not just everyday car owners that are affected by this latest budget. Heavy goods vehicles (HGV) drivers have also been impacted by the Spring Budget with the announcement that the HGV levy suspensions will remain in place until July 2023.
The HGV levy was first introduced in 2014 to ensure that HGV drivers are treated just like other road users. These charges were paused in 2020 in line with the coronavirus pandemic, and have remained in place to this day. The goal behind this being to reduce the financial pressure on the haulage industry, helping them recover from the turbulent situation they found themselves in just three years ago.
While many UK households continue to feel pressure from the cost of living crisis, particularly around paying for fuel to heat their homes (and power their cars), the government has announced that fuel duty (the fuel tax) has been frozen for another year.
Fuel duty has been stuck at 52.95p for the past 12 years, and these most recent changes are expected to cost the government £5bn for the next year alone. This means that petrol prices shouldn’t increase beyond 5p higher than current rates, and that homeowners can enjoy heating their homes without any further risks of prices increasing.
Is every UK driver’s pet peeve about to be fixed? Well, not for all of us, but the government has announced a £200m influx of spending to help fix potholes in the most affected councils across the UK.
Pothole filling funds usually gets £500m allocated to it every year, but as most drivers will be able to attest, that clearly isn’t enough. The extra £200m takes the total to £700m; a fairly substantial increase. It remains to be seen whether this will result in actual noticeable change in the presence of potholes, but additional funding to tackle these types of issues is always welcomed.
It’s clear that the government has paid a lot of focus to our road networks this year. While it is unfortunate that tax rates have risen, we hope that these structural changes will help make roads safer for UK drivers.
If you need help perfecting your driving technique, or simply want to learn more about how your car operates, findandfundmycar.com is the place to be. We frequently write articles covering the whole motoring industry including explanative pieces around your car’s mechanics, as well as historical views back to the past of when motoring first began and how it has changed. Keep up to date with our latest articles right here on our website.
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