Budget 2016: Key points at a glance

The Chancellor of the Exchequer George Osborne has announced his eighth budget, with some small changes for drivers and car owners in the UK. 

Here is a summary of the key announcements and how they will impact your pocket.

Vehicle Excise Duty 

Rates will rise inline with the RPI inflation rate, from 1 April 2016 ahead of an all-new system being introduced in 2017.

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Fuel Duty 

Fuel duty will remain frozen at 57.95 pence-per-litre. Fuel duty has not increased since 2011, when Labour’s fuel duty escalator was scrapped.

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Additional £300 million earmarked for roads

The upgrades will include a new fund for fixing potholes, improvements to the UK’s major motorways and a new Trans-Pennine tunnel.

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Electric van BIK to stay at 20% until 2019

The Government has deferred the planned increase in BIK tax for electric vans, meaning it will stay at 20 per cent of the rate of a diesel or petrol van until 2018.

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Salary sacrifice car schemes to be reviewed

The Government has committed to review salary sacrifice schemes in view of increased take-up in recent years, and car schemes would not be protected.

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Number of higher rate taxpayers to fall

Many company car drivers could see themselves falling out of the higher 40 per cent tax bracket, or choosing a more valuable company car and remaining 20 per cent tax payers.

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Businesses encouraged to lease lower CO2 cars

Businesses that lease vehicles are being encouraged to choose ever more fuel-efficient vehicles as lower thresholds for capital allowances are being introduced.

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Insurance management claims companies to face stiffer regulation

Responsibility for regulating CMCs will be transferred from the Ministry of Justice to the Financial Conduct Authority with the aim of clamping down on rogue claims management companies.

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