Budget 202105 March 2021
Chancellor Rishi Sunak made his Spring budget announcement earlier this week and we’ve captured the key points that motorists should take note of.
For the eleventh year running, fuel duty will be frozen meaning it stays at 57.95p per litre. This is great news for drivers as it will help keep overall cost of living down which is much needed.
In less good news, Vehicle Excise Duty – more commonly known as car tax - will increase from 1 April 2021. For cars registered on or after 1 April 2017, VED will rise to £155 a year, with a £10 discount for hybrids. Cars that are valued at more than £40,000 will see VED increase to £335 per year for years two to six of ownership.
For electric cars, VED remains at zero for another year. It’s important to note that drivers with an EV company car will have to start paying ‘Benefit in Kind’ tax from April 2021. From April, the rate will increase to one per cent and then rise to two per cent in 2022.
VED rates are also increasing for older cars. For cars registered between 1 March 2001 and 31 March 2017 they will rise by £5, £10 or £20 depending on the vehicle’s emissions. For cars registered before March 2001, they will increase by £5 for vehicles with an engine size of 1549cc or less and £10 for anything with an engine above 1549cc.
To help support the recovery for the haulage sector, VED has been frozen for HGVs for 2021-22 and the Chancellor has also suspended the HGV Levy for another 12 months from August 2021.
The Chancellor also confirmed that fuel benefit charges for company cars, as well as the van benefit charge, will increase in line with the consumer prices Index (CPI) from 6 April 2021.
Finally, it was announced that £4.8m would be available to support the development of a hydrogen hub in Holyhead, Anglesey. Hydrogen as a fuel source is something we have been watching for a while so check out our blog on why we think Hydrogen might be the future for the motoring industry.