• How the Budget Will Affect Commercial Vehicles

  • The Chancellor made a number of announcements in the Budget last month that will affect commercial vehicle drivers and operators.

    Fuel duty – the scheduled rise in fuel duty from April 2018 was cancelled and will remain at 57.95 pence per litre.  It is the eighth consecutive year that there has been no increase.

    Vehicle Excise Duty – from 1 April, 2018, VED rates for vans registered before April 2017 will be £250, but for early Euro 4 and Euro 5 compliant vans it will be £140.

    Van and fuel benefit charges – the Government will increase the van and van fuel benefit charges in line with the September 2017 Retail Price Index.  The change will take effect from 6 April, 2018.  The Government will legislate to ensure the changes are reflected in tax codes for 2018-19.

    The new figures have yet to be announced, but sums for 2017/18 are:

    • Van benefit-in-kind charge:  £3,230
    • Van fuel benefit charge:  £610

    The charge for zero-emission vans remains at 20% of the main rate in 2017/18, but will then increase on a tapered basis to 5 April, 2022 – 40% in 2018/19, 60% in 2019/20, 80% in 2020/21, 90% in 2021/22 and then equalising with the standard charge in 2022/23.  The Government says it will review the impact of the incentive at Budget 2018 together with enhanced capital allowances for zero-emission vans.

    Air quality – in support of the National Air Quality Plan published in July, the Government will provide £220 million for a new Clean Air Fund.  It will allow local authorities in England with the most challenging pollution problems to help individuals and businesses adapt as measures to improve air quality are implemented.  The Fund will be paid for by a VED supplement on new diesel cars and a rise in the existing company car tax diesel supplement.  Diesel vans will be exempt from this.

    Electric vehicles – from April 2018, there will be no benefit-in-kind charge on electricity that employers provide to charge employees’ electric vehicles.

    Ultra-low emission vehicles – to support the transition to zero-emission vehicles, the Government will regulate to support the wider roll-out of charging infrastructure, invest £200 million (to be matched by private investment) in a new £400 million Charging Investment Infrastructure Fund, and provide £100 million to guarantee continuation of the Plug-In Grant to 2020 to help with the cost of purchasing a new battery electric vehicle.

    Transforming Cities fund – a £1.7 billion fund will support intra-city transport by targeting projects which drive productivity by improving connectivity, reducing congestion and utilising new mobility services and technology.

    Pothole fund – the Government is investing an additional £45 million in 2017/18 to tackle around 900,000 potholes across England.