The existing diesel benefit-in-kind tax supplement of 3% will rise by 1 percentage point to 4% from April 2018.
The first-year VED rate for diesel cars that don’t meet the latest emission standards will also go up by one band.
The Chancellor, Philip Hammond, said that the Vehicle Excise Duty (VED) measure would only apply to cars. “So before the headline writers start limbering up let me be quite clear,” he said. “No white van man or woman will be hit by these measures. This levy will fund a new £220 million Clean Air Fund to provide support the implementation of local air quality plans.”
Examples of impact on company car tax of the first year one-off VED increase (Source: HM Treasury)
We’re glad that the Chancellor has listened to motorists and the fleet industry, and decided to extend the freeze on fuel duty for another year. However, even with a freeze, fuel prices are still rising. If this continues, the Chancellor should consider cutting duty rates for the first time since 2011.”
Fuel duty will be frozen for an eighth year in 2018-19. The Government says that fuel duty freezes since 2011 will have saved the average driver a cumulative £850 by April 2019, compared to what they would have paid under the pre-2010 escalator plans.
The Government will also review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018.
In the meantime, it will end the fuel duty escalator for Liquefed Petroleum Gas (LPG). The LPG rate will be frozen in 2018-19, alongside the main rate of fuel duty.
The Fuel Benefit Charge and the Van Benefit Charge will both increase by RPI from April 6, 2018.
In support of the National Air Quality Plan published in July, the Government will provide £220 million for a new Clean Air Fund. This will allow local authorities in England with the most challenging pollution problems to help individuals and businesses adapt as measures to improve air quality are implemented