As is the case after every budget economists, bloggers & other interested parties rush off to pour over the official post speech documentation to find as much of the detail around the chancellor’s latest speech and cast general comment. Fortunately at CarCare Direct we can limit our attentions to the changes likely for the motorists & the wider automotive industry  

£250 million fund to “deliver a green motoring transformation” by 2011

Announced earlier in the week but confirmed by the chancellor the Government has decided to create a fund of £250 million to support the ordinary motorist to the tune of between £2000 - £5000 towards the cost of an ultra low carbon vehicle. In addition there is the promise of a further £20 million to create the charging infrastructure in key cities across the UK. Whilst this is a welcome level of support the fear is that it could create a vacuum as consumers understandably defer purchases until grants are made available. Not good news for those manufacturers & distributors providing electric & ultra low carbon vehicles already

£2000 off price of a new car as part of scrappage scheme incentive

At last the speculation is over & “most” of the details around the long awaited scrappage scheme are out. £300 million has been set aside for the scheme planned to be launched by mid May & running until the funds are exhausted or March 2010, whichever comes first. Interestingly the Government is only pledging £1000 of the money asking the motor industry to match this value (not quite what the industry had been hoping for and not the mechanism taken in other European countries) We will have to wait to see how manufacturers sign up.

 From the consumers perspective if the car makers have to find half the money then additional discounts are unlikely. Equally only cars up to 10 years old, with a current MOT are included & they must have been registered to the current keeper for at least 12 months & then can only be “scrapped” against a brand new car. Not quite the incentive many consumers and dealers were hoping for particularly as it is only applying to new and not nearly new cars

White Van man included

Perhaps the biggest surprise of scrappage scheme, well a surprise until it was front page of the Sun, was the inclusion of vans up to 3.5 tonnes. Quite what the take up will be is unclear but, like cars it will assist in removing less safe and higher emitting vehicles from the road. Your 10 year old van driver may be pleasantly surprised to find new vans have power steering, ABS, central locking and some have air-conditioning

Fuel duty rise 1^st September 2009

Despite only increasing fuel duty on 1^st April 2009 Alastair Darling has announced a further 2p per litre rise on 1^st September 2009. The double whammy was an announcement that there would be an ongoing annual increase in duty of a further 1p per litre (plus whatever the rate of inflation is at that time) from the 1^st April 2010 onwards. This is then, in January 2010, compounded by a return of VAT to 17.5%. The AA has described it as a “Fuel duty bombshell for families”.

£80,000 P11d cap abolished

Senior executives will be feeling the pinch come April 2011 when the P11d ceiling of £80,000 is removed and company car drivers lucky enough to enjoy the generous benefit of the upper echelons of motoring will find them being taxed based on their cars actual P11d. This will be applied to cars registered before 2011 according to HMRC. Life is getting tougher at the top

Company Car tax changes to co2 thresholds and lower rate from 2011

This detail is still filtering through at time of writing as it wasn’t included in the main speech. In essence there will be a change to the co2 bandings. From 6^th April 2011 the 15% Co2 threshold will drop by 5g Co2 per km to 121g/km -129g/ km moving many into the next band up. The proportion of a company car’s list price that is subject to tax will increase by 1 percentage point with each 5g per km that its CO2 emissions exceed this threshold, to a maximum of 35 per cent for company cars emitting 225g CO2 per km and above. In essence many cars will move bands and company car drivers who chose based on current bandings will find themselves paying more company car tax. The treasury expects to yield an additional £85 million on the back of this in 2011/2012

Confirmation of pre budget announcement for disabled company car drivers

Disabled company car drivers received confirmation that from 6 April 2009, disabled company car drivers will be able to use the list price and CO2 emissions of an equivalent manual car when calculating their company car benefit charge.

More company car tax changes scheduled for 2012

The next changes being planned for 2012 will see the removal of the lowest company car tax band of just 10% for cars emitting sub 120g/km. Fortunately many of the cars the manufacturers have been producing to get into this band are jolly good so at least you’ll still like the car even if your BIK burden has gone up. Ironically it is these advancements by the car makers that have lead to Mr Darling scrapping the lowest band, great.

RFL, VED pre budget changes confirmed

The main changes, from May 2009, see an increase in the number of VED bands from seven to thirteen. This will provide a greater incentive for drivers to choose a lower carbon version of car within their preferred class, or so they say. By 2010 these thirteen will be modified, again based on Co2 lowering the thresholds for the lower bands plus will also see the introduction of revised first registration fees again based on Co2. Basically this is an additional first year fee with big polluters facing a hefty fee.

£700 million of transport spending brought forward from 2010-11 into 2009-10.

£400 million of this will be used by the Highways Agency to accelerate high value schemes on the strategic roads network. This includes £100 million to dual the A46 from Newark to Widmerpool, with £300 million to advance the managed motorway works on the M1 and M6 and to accelerate specific asset

renewal work and technology improvements across the network. Expect road works and new overhead signs would be our best guess. Further work should start on the M25 with the Highways Agencies hoping to sign the widening work proposed next month, which should employ up to 4000 people per year during the construction period.