Budget: The headlines
March 25th, 2010 by Richard Aucock
CHANCELLOR Alistair Darling has revealed details of a delay to fuel duty rates in today’s budget.
The announcement means the full price rise originally scheduled for April 1 will not come into force until 2011.
But the Chancellor has made no announcement on delaying the controversial ‘Showroom Tax’. Thus, from April 1, there will be a big tax rise for new high-emitting cars.
Fuel duty: Oil prices have risen by 50 percent, said the Chancellor. This is why the scheduled fuel duty rise will be staged: 1p in April, 1p in October, the remaining 1p in January. The full rise will be offset until the beginning of 2011.
Showroom tax: This will come into force on April 1, and will see up to £950 added to the price of the first-year car tax rate. Cars emitting over 255g/km CO2 will be hit with the maximum rate.
However, all cars emitting less than 131g/km will pay NO VED tax in the first year. After first-year rates, VED prices revert to their standard rates.
VED rates: Free for cars less than 100g/km, they are now £20 for 101-110g/km cars, up to a maximum of £435 for cars producing mover 255g/km. For already registered cars, there is generally up to a £30 drop for green cars, and a £30 rise for uneconomic cars.
The Chancellor also praised the scrappage scheme, which he said boosted sales by 30 percent over the past year. This is despite the UK economy declining by 6 percent during the recession.
Meanwhile, other announcements were made in the Budget that could be of interest to car dealers and why:
Retirement: Consulting on scraping forced retirement at 65. This could mean you’ll have to keep on employees until they want to retire, not you.
Stamp duty: First time buyers’ get a stamp duty holiday up to £250,000. This is likely to add confidence to the housing market and get things moving. That confidence could turn into car sales as many hold off when they fear their homes are worth less. Stamp duty on homes worth over £1m will be raised to 5 percent.
Tax: Personal allowances for those earning over £100,000 will gradually be reduced. The 50% tax bracket for those earning over £150,000 will start in April.
Small businesses: They will have their business rates cut from October 1. Many will pay no tax at all. Rates are the third biggest costs for small businesses.
Bank lending: To give SMEs sufficient lending, RBS and Lloyds will be committed to provide £94bn of loans, with half going to small businesses.The FSA will also speed up the licensing process for new banks, which could help lending to car dealers. A new body has been set up – UK Finance for Growth.
Apprenticeships and training: These have been given an extra boost thanks to a £2.5bn reallocation of funds. There will also be more funding for universities.
Green cars: 50 percent of all Ford diesel engines in the world are now produced in Dagenham. The Government will continue supporting projects to establish green transport, as was announced during last week’s Nissan LEAF announcement.
By Richard Aucock and James Baggott
Tags: budget 2010, government