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Autumn statement: Scrapping of diesel surcharge delayed

  • The three percent diesel surcharge will remain in place until 2020/2021
  • Continued support for ultra-low emissions cars
  • A £250m pothole fund is also announced

George Osborne delivered his first Autumn Statement today as the Chancellor of a Conservative government. In it he announced an increase in public spending, more money for the NHS, a million extra jobs would be created within the next five years, a rise in the Basic State Pension and no cuts to tax credits.

Big news for company car drivers is the announcement that diesel cars will no longer see a drop in BIK as the three percent surcharge, which was due to be scrapped in April, will now remain in place until 2021.

The planned scrapping of the diesel surcharge in the 2016/17 tax year would have meant petrol and diesel engines being taxed the same in relation to CO2 emissions resulting in many diesel company car drivers seeing their BIK tax bills fall next year.

However, with the testing of diesel cars coming under scrutiny in recent weeks following the VW emissions scandal, Osborne has delayed the surcharge removal until a new testing process is in place to more accurately record car CO2 emissions.

"In the light of the slower than expected introduction of more rigorous EU emissions testing and recent concerns regarding diesel engine emissions, we will delay the removal of the diesel supplement on company cars until 2021,” the Chancellor said.

The loudest cheer during the Chancellor’s statement came from the news that there will be no cuts to police spending.

Osborne also stated that ultra-low emission cars will continue to be supported by the government and the UK now has a permanent £250-million pothole fund.

There was no mention of any changes to fuel duty.