Budget 2008

How will this year's Budget affect you the motorist? We give you the lowdown.

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12th March 2008

The latest Budget means that motorists are facing an extra £1,000 in taxes. While Chancellor Alistair Darling delayed increasing the price of fuel, he did signal that the taxation system would change to punish the most polluting motors.

However, the big news was a ‘green’ purchase tax on new cars. Set to take effect in 2010 it will result in a one-off £950 bill for buyers of cars that produce more than 255g/km of CO2. Mr Darling explained: “A higher first rate will be introduced on the most polluting cars. If people choose to buy a more polluting car they should pay more in the first year to reflect the environmental cost”.

Motors that put out 130g/km or less will be exempt from paying any road tax in the first year.

In 2009 there will be a revision of the Vehicle Excise Duty (VED) bands. Extra categories and annual charges will be added for motors that produce CO2 emissions of more than 255g/km. The changes will also offer financial incentives to drivers of the cleanest-running vehicles.

The Chancellor also re-stated the Government’s commitment to road charging. In his statement he claimed: “I am setting aside new funding to develop the technology that could underpin national road pricing, inviting tenders to test this with the results expected next year”.

The planned two pence rise in fuel duty has been delayed by six months, putting it back to October. With prices at the pumps rocketing by around 20 pence a litre over the past year Mr Darling was forced admit that any increase would have an adverse effect on both individuals and businesses.