2020 budget: Splashing the cash for motorists
Benefit-in-kind car tax freeze
The future of company car benefit-in-kind tax has been finalised. The gist of it is that vehicles registered before April 6th 2020 and those purchased after will follow two different taxation programs. This is due to the adoption of the Worldwide harmonised Light vehicles Test Procedure (WLTP). The test is designed as an update to the older NEDC standard, originally established in the 1980s.
For the 2020 to 2021 financial year, most company cars registered after April 6th will carry 2% less tax. There’s a new zero percent tax bracket for no-emission vehicles, doubtless, to encourage the sales of electric-powered models.
In the consecutive financial years, rates will increase by one per cent for both 2021-2022 and then 2022 to 2023. The rates for the latter fiscal period will be locked during 2023-2025.
Vehicle Excise Duty exemptions
Though Vehicle Excise Duty rates will increase across the board as normal, electric vehicles will be exempt from the VED “expensive car supplement”. That comes into effect on April 1, 2020, remaining in force till March 31st, 2025. Under the current rules, vehicles over £40,000 are subject to a £320 supplemental charge. This rule is designed to smoothen the transition to lower emission vehicles.
Fuel duty freeze
Fuel duty remains frozen, as it has for the last decade. It is thought drivers save £1,200 every year on fuel because of this measure. In combination with the recent drop in oil prices, motorists should save each time they fill up at the petrol station.
In a further move to incentivize the sale of plug-in and battery electric vehicles, the Government is making the 100% first-year allowances on these models extend for four years.
Roads and potholes
If you’re fed-up with a road network that seems to be littered by potholes and broken surfaces, £500 million is set aside for repairs. This is believed to be enough to fix 50 million of the imperfections nationwide. £1.5 billion for 2020-2021 will be spent on road resurfacing and potholes overall.
By the end of 2024-2025, the Chancellor has pledged £640 billion in total for road development and the improvement of current roadways. These should help steady traffic flow and reduce journey durations.
Electric vehicle recharging investment
The budget allocates £500 million for a five-year fast-charging network expansion. The end goal is to make sure drivers are always within 30 miles of a rapid charging point.