Pre-Budget Report details

  • New VED bands postponed
  • Road tax increase maximum of £5 in 2009
  • Fuel duty up 2p-a-litre
Here is how the Chancellor's Pre-Budget Report will affect motorists in the UK.

VAT cut to 15%, but fuel duty is increased
The Chancellor has confirmed VAT will be cut from 17.5% to 15% until the end of next year, coming into effect next Monday.

The cut will translate into a saving of around 2p-a-litre of petrol and diesel. However, Mr Darling has also said that petrol duty will be increased to help make up for the loss of revenue from cutting VAT.

Fuel duty will increase by 2p-a-litre from December 1, so when the cut in VAT is combined with the 2p-a-litre increase, motorists should expect prices to remain about the same as they are now.

VED road tax
The planned new bands for vehicle excise duty will be postponed until April 2010.

New duty rates will be phased in, but no driver in any given band will pay more than £5 extra in 2009 or £30 extra in 2010.

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