Budget 2014: What it means for motorists

George Osborne has delivered his budget, but how will it impact on the UK’s motorists? Here’s The Crawley Down Group’s quick guide to what’s new…

Budget 2014/14 motoring-related headlines:

Fuel duty: The Chancellor confirmed his announcement from the autumn 2013 statement that a planned 1.6p per litre rise in fuel duty will not go ahead. This means there’ll be no further hikes in duty until after the 2015 general election.


Professor Stephen Glaister, director of the RAC Foundation, said: ‘The good news is that fuel duty has now been frozen since March 2011. The bad news is that the UK’s 37 million drivers still pay the highest proportion of petrol and diesel tax in Europe.’

The AA has also revealed independent forecasts suggest at a 7p per litre hike is likely in post-election years from 2015 to 2018.

Pothole fund: George Osborne announced a £200 million ‘potholes challenge fund’. Billed as ‘emergency funding’, the UK’s local authorities will be able to bid for cash to repair up to 3.2 million potholes.

The RAC Foundation’s Professor Stephen Glaister welcomed the cash, but warned: ‘The drip, drip of funding does not address the £10 billion road maintenance backlog that councils themselves have identified.’

Vehicle excise duty: From April 1, VED (road tax) rates will increase in line with RPI. The reality of this that most of us will see a rise of 2-3% compared with what we’re currently paying.

Death of the disc: It’s was also confirmed that the obsolete paper ‘tax disc’ will be axed and replaced by a fully electronic system. Motorists will also be able to spread the payment over the year – however, they’ll pay a 5% premium for the pleasure.

LGVs: The Treasury will freeze road tax rates for Euro IV and V light goods vehicles in 2014/15.

Classic car VED exemption: Previously, only cars built before January 1, 1973, were exempt from road tax, but from April 1, this will change to a ‘rolling’ 40-year period – meaning many newer vehicles will benefit.

Company car tax: The 2% increase in company car tax will be extended to 2017 and 2018, while there will be an increased discount for ultra-low emission vehicles.

Van benefit charge 2014/15: The van benefit-in-kind tax charge will increase from £3,000 in 2013/14 to £3,090 in 2014/15.

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