Chancellor’s Autumn Statement announces changes to fuel duty and tax discs
The Chancellor has abolished the tax disc and frozen fuel duty for the remainder of the Parliament in his Autumn Statement, in a series of announcements that will benefit fleet operators.
The introduction of an online system, in place of the current paper tax disc, will benefit fleets, resulting in an estimated £10m cost saving per annum. It will also speed up leasing and rental processes, as well as saving £3m for the DVLA, according to the BVRLA, the rental and leasing industry’s trade body.
The BVRLA welcomed the news, recognising that the tax disc’s abolition would remove an administrative burden for millions of motorists and businesses.
“The tax disc decision is a major victory for the Association, which has been campaigning for the Department for Transport to axe the tax disc for a number of years as part of a wider streamlining of DVLA services,” it said in a statement.
The new VED payment methods for fleets are in development and the BVRLA is working with the DVLA in preparation for the switch in October 2014.
Further changes benefit all drivers; the DVLA will offer motorists the choice of paying their vehicle excise duty via direct debit – either annually, bi-annually or monthly.
There will be no additional charge for annual payments although there will be a small increase of 5% for bi-annual and monthly payments, although this is lower than the current 10% surcharge applied to six monthly tax discs.
In terms of fuel duty, George Osborne announced that the fuel duty increase which had been planned for September 2014 will be cancelled.
Fuel duty has now been frozen for over four years. Average fuel prices are 13 pence per litre lower than if the fuel duty escalator had gone ahead as planned and will be 20 pence per litre lower by the end of the Parliament, the Chancellor said.
It is estimated that it will cost the average motorist £7 less to fill up their car, potentially £11 less by the end of the Parliament, following this announcement. To assist motorists further in reducing costs, new road signs are to be trialled on motorways which will show prices at different services stations allowing for easier price comparison and encouraging greater competition.
And in another move favouring the motorist, the statutory maximum price for a car MOT test is to be frozen at £54.85 until 2015.