November 14, 2018
It was announced by Chancellor Hammond in his Budget on October 29th 2018 that Vehicle Excise Duty (VED) would increase for vans by the Retail Prices Index which will become effective in April 2019
Currently there is a bizarre anomaly in the VED for vans and this is receiving scrutiny from a number of different parties, currently vans which meet more recent and more stringent Euro 6 emissions standard pay more VED than those vans meeting older and less stringent Euro 4 or Euro 5 emissions standards.
However there is currently a consultation aimed at reforming VED to provide van drivers with the incentive to make the cleanest choices when making a new van purchase. As it stands, Euro 6 van drivers pay VED at the rate of £250, whereas Euro 4 or Euro 5 van drivers pay £140 a year. Whilst electric vans pay zero rated VED.
The Government has published a summary of responses to the consultation, this sets out proposals to introduce environmental incentives from April 2021, including a £0 standard rate for zero-emissions vans. Bands and rates will be set out ahead of Finance Bill 2019-20.
At the budget, the chancellor confirmed that the fuel duty would be frozen for the ninth consecutive year, costing the Exchequer £840m in lost revenues for the 2019/2020 tax year, whilst also saving the average driver a cumulative £1,000 by April 2020.
The Government announced that they would be extending the first-year allowance for electric charging points for four years. This will extend allowances until 31st Match 2023 for corporation tax and 5th April 2023 for income tax purposes.
A National Roads Fund of £28.8 billion was announced, paid for by road tax. This includes £25.3 billion for the Strategic Road Network (motorways, trunk and A roads), said to be the biggest ever investment of this kind. Local authorities will receive a total of £420 million to renew bridges and tunnels and fix potholes on roads. There will also be a total of £150 million to improve local traffic hotspots including roundabouts.
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