The Budget: How it affects motorists

21 March 2007

Road tax bands widened
Fuel duty up by 2p
Fuel price hike deferred until October

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Chancellor Gordon Brown has delivered what will probably be his final Budget.

The main points for motorists are as follows:

Vehicle Excise Duty (Road Tax)
• Buyers of cars registered after 23 March 2006 in the highest Band G – those that emit more than 226g/km of CO2 – will see their road tax go up £90 to £300 this year and increasing to £400 in 2008.

Of all the models on sale in the UK, 743 are classified in Band G . Of those, 210 (28.3%) are 4x4s.

• Owners of cars in Band B see their road tax bills cut £15 to £35 for 2007 and 2008 and then for next two years the rate will be frozen. There are 111 101-120g/km Band B model on sale in the UK.

• Road tax for vehicles in Bands C to E will rise by £5 each year for the next three years

• Band F – for vehicles that emit between 186 to 225g/km of CO2 – will rise £10 for years 2007 and 2008 and then by a £5 in the following two years. There are currently 764 Band F models on sale in the UK.

•The current differing rates between VED on petrol and cars will be now be the same but at the higher diesel rate

Fuel Duty
• Fuel duty up 2p-a-litre this year and next, but this year's price rise will be deferred until October

• Fuel duty up 2p-a-litre in 2008 and 1.8p-a-litre in 2009

Biofuels
• Biofuel duty differential, worth 20p-a-litre, extended from 2009 to 2010

• Biogas incentive, worth 40p-a-litre, extended from 2010 to 2012

Company car tax

• There will be a 2% company car tax discount for E85 company cars will be introduced from April 2008.

• Company Car Tax rates and thresholds will be frozen for 2009-10. The Company Car Fuel Benefit Charge multiplier will remain frozen at £14,400 for 2007-08.

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