Budget 2013: How it affects you

  • Fuel duty hike for September scrapped
  • Grace period for renewing road tax disc extended
  • New tax bands introduced for company car drivers

The 2013 Budget brought some welcome relief for UK motorists.

First up is the news that the planned fuel duty hike of 3p a litre due on September 1 has been cancelled.

That would have added nearly a couple of pounds to filling up a Ford Focus, with the cost rising from £73.14 to £74.73 based on an average of £1.38 for a litre of unleaded.

The government stated that the value of cancelling all the planned fuel duty hikes over the past two years is a saving of 13p a litre. Otherwise, that would mean a litre of unleaded would cost £1.51 and filling the Ford Focus would cost over £80.

The grace period between your road tax running out and displaying your new disc has been extended by 7 days to 14 days in total. However, it only applies to those who have paid for a tax disc.

The government also announced that the process for declaring your car off road remains the same. The Statuory Off Road Notice (SORN) continues and can be completed online, though the significant change is that the application only needs to be made once and not annually as before. When the vehicle is put back on the road, a road tax application should be made.

For company car drivers there was news of two new company car tax bands for very low emitting cars including cars with zero emissions.

From April 1 2015 there will be a band of 0-50g/km of CO2 and 51-75g/km, with the former tax band attracting 5% BIK banding in 2015-16 tax year and moving up to 7% the following tax year. For company cars that emit 51-75g/km of CO2 the band will be 9% in 2015-16, moving up to 11% the following year.