Fuel duty frozen and tax disc scrapped

  • Fuel duty frozen until September 2014
  • No paper tax discs will be issued after October 1, 2014
  • Calculate your tax with the Parkers company car tax calculator

Chancellor of the Exchequer, George Osborne, has delivered the Government’s annual Autumn Statement in the House of Commons, which brings with it a welcome relief for drivers.

One of the biggest announcements was that the planned fuel duty increase for September 2014, expected to cost an additional 1.61p per litre, will be cancelled.

It is the latest planned fuel duty increase proposed and then axed by the Government and means that duty will have remained steady for almost four-and-a-half years, the longest period without change for more than 20 years.

The Chancellor said that as a direct result of Government action since 2011, its strategy on fuel duty would save drivers £680 by 2015/16, a small business with a van would save £1,300, and a haulier £21,000 compared to pre-2010 plans for a fuel duty escalator.

He added: “Cancelling fuel duty rises has been a major priority of the Government. A £22.5 billion demonstration that we’re on the side of hardworking people in this country.”

However, not everyone agrees with the government move. Quentin Wilson, lead campiagner for the fair fuel UK campaign said: "The Chancellor had it in his gift to ease the burden for businesses and families battling to drive to their jobs."

He added: "We can only ruefully wonder why he didn't act to help protect them."

Farewell to the tax disc

The government also announced the paper tax disc will be scrapped and no longer issued from October 1, 2014 - but that does not mean the end of Vehicle Excise Duty.

The move is designed to cut costs and because the majority of checks for a car's road fund licence is carried out electronically so the need for a paper disc to be displayed in a car's windscreen is increasingly redundant these days.

Furthermore it is aimed at reducing the administration burden and costs by about £7 million. The disc was described in the Autumn Statement as an “administrative inconvenience for millions of motorists”.

The cost of company car tax is based on a car's CO2 emissions, where the lowest emitting cars attract the lowest charge. To find out what your current company car tax will cost go here.