April 08, 2016 at 1:36 PM
The Chancellor of the Exchequer George Osborne has prepared his annual Budget plans for the assembly a couple of weeks ago.
The 2016 Budget, his eighth Budget announcement since he became Chancellor, was likely to give some great significant implications for motorists by several policy changes and new investments.
Below are the most important parts of the Budget announcement that every driver has to comprehend.
Fuel duty remains frozen
It was quite surprising that the Chancellor did not increase fuel duty tax to close the gap in Britain’s finances more.
A research conducted by Green Flag gave an alarming possibility that between a fuel duty hike and an expected rise in fuel costs, as many as one in 20 drivers would have to completely get rid of their cars.
However, the Chancellor believes that the freeze will save the average motorist £75 a year and the average van-owning businessman as much as £270 a year. He describes it as “the tax boost that keeps Britain on the move’, it’ll come as welcome news to motorists.
Rise in Insurance Premium Tax
Even though fuel duty will stay the same as for this period of time, the Insurance Premium Tax will escalate from 9.5 percent to 10 percent.
It is merely a small increase, but it follows a 3.5 percent rise in tax last year driving up insurance premiums as the extra cost has been passed to customers from insurers.
According to the Association of British Insurers, motor insurance premiums have increased eight percent in the past year, and may likely increase this year more and more. However, Mr. Osborne stated that all the extra revenue which came from the tax hike will be spend on a new £700 million flood defence plan.
£50 million Pothole Action Fund
Based on the Budget announcement, a £50 million fund has been included to repair potholes on English roads which will authorize local authorities to repair a million potholes by 2017.
An addition of £130 million has been allocated to repair roads and bridges damaged by several storms that devastated Britain in late 2015 and early 2016.
Severn crossings toll halved
The current £6.60 toll charges for cars on the Severn crossings between England and Wales will be halved from 2018 onwards.
The concerns of MPs in Wales and the toll costs were taken into consideration by the Chancellor. The toll costs are presently collected to make the construction a success. The running costs of the crossings will be reduced after two years when the costs will be regained.
At present cars are charged £6.60 to cross, while vans have to pay £13.20 and lorries and buses both pay £19.80. Fortunately, motorcycles can cross for free and this will continue from 2018 onwards.
£230 million road investment
The Budget announcement has also allocated £230 million to fund road upgrades including the M62 in the north of England, upgraded to four lanes from three lanes. The A66 and A69 will both also be upgraded.
Company car tax threshold cut to 110g/km
Company cars’ main rate threshold for capital allowances will be cut to just 110g/km of CO2 from April 2018, down from the present threshold of 130g/km.
The First Year Allowance threshold will also fall to 50g/km down from 75g/km to reflect falling vehicle emissions, but from 2018 the 100 percent First Year Allowance for cars with low emissions will be extended for three years until April 2021 as a way to improve low-emission vehicle uptake.
The Chancellor stated that until 2021, company car tax will continue to be based on CO2 emissions, but there will be further discussions to make sure taxing ultra-low emission vehicles from the start of the next decade onwards will succeed.
Driverless car trials
Despite the fact that there was no announcement about investing into driverless car legislation, the Chancellor pointed out that the trials for driverless vehicles will be done on British road networks by 2017.
The government plans to remove regulatory barriers from keeping autonomous cars using major British roads from this summer onwards. This aims to having driverless cars available to buy and use from 2020.
Mr. Osborne also discussed a £15 million investment into a connected corridor’ between London and Dover. This will be used to trial car-to-car communications systems.
Motorway fuel stations to display prices
Several fuel stations on stretched of the M5 motorway between Bristol and Exeter will conduct trials of new comparative fuel price signs from spring this year.
As first discussed in the Autumn Statement in 2014, the plans will convince fuel stations to show their fuel prices to create competition and reduce prices after complaints that fuel stations deceive drivers.
After having trialed at five fuel stations on the M5, it is possible that if the test period is successful the signs could be rolled out throughout the nation by the end of the year.
£75 million fund for Trans-Pennine Tunnel
The Budget also included £75 million that will be used to develop a case for the so-called Trans-Pennine Tunnel. This will be an underground road that will run between Manchester and Sheffield.
Having been proposed late last year, it is possible that the tunnel will better connect major Northern cities and fuel the government’s vision of the ‘Northern Powerhouse’ which will allow drivers to travel more conveniently to new jobs in the northern part of Britain.
The Trans-Pennine Tunnel is expected to be up to 18 miles long. It would be one of the longest tunnels in the world. However, experts said that the tunnel’s length could be troublesome and hazardous for drivers due to possible poor visibility, claustrophobia, etc.