As you’re on this site, you probably have an interest in cars, are a driver or are hoping to become one very soon. As such, there’s no doubt at all that the budget affects you, whether you’re a millionaire or on minimum wage. Let me just say this first – the budget hits you where it hurts. Once again, us cash-cow drivers are going to suffer in a number of ways…
Fuel
Petrol and diesel prices had a planned rise of 2p per litre – however thanks to much industry (and some joe bloggs) lobbying, we’ve now seen this put back to October. To me though, this just stinks of ‘stealth tax‘. What I mean by this is that if the government can make everyone calm down or forget about it for long enough, they won’t complain half so much and the coffers will still be filled. Fuel duty also has a guaranteed rise of 0.5p per litre in 2010 – no doubt with more raises in-between.
Alternative fuel
Cars that aren’t powered by petrol or diesel are on ‘alternative fuel’. Those cars could well come in for a discount of up to £20 per year on their road tax. Not great, but better than nothing. Duty differential will disappear from alternative fuel and a Renewable Transport Fuel Obligation will force suppliers (such as Shell) to ensure that 5% of their fuel comes from renewable sources.
Vehicle excise duty/road tax
The number of bands for excise duty will go all the way up to 13 from next year, with band M (255g of cO2 per km) being charged an annual fee of £425 per annum. Cars with a lower than 150g output per km will pay a lower rate from 2010 (why not from next year like the higher paying cars is anyone’s guess). Cars with a lower rate than 130g will not pay road tax in their first year. If this were every year I’d see the point… but just in the single year? Regardless, the most shocking fact is that band M cars will receive a massive bill of £950 in the first year.
Funding for more tax
The government has freed up funding for local councils and private companies to investigate the idea of further congestion charges and national road pricing. It’s a great way to essentially fund further taxation I must say, and I’m not quite sure how making people pay more will stop them using the roads that they physically must use.
My overall thoughts on the budget
Frankly, as per usual, those who drive have been hit where it hurts – their wallets. I’m not surprised, given the fact that more than £45 million is generated for HMRC every year. However, as long as the government has the ideal of ‘being green’ to hide behind, people won’t rally behind the injustice of how much we pay for cars. The budget is once again unfair and a great way to eke more money out of an unwitting public.
As a side note, due to the fact that we’re close to recession, this is one good year to buy a used vehicle. Depreciation is going to be 8% more than expected, so look for a car in a couple of months to pay a price that’ll keep some change in your pocket.
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