March 2013 Budget: Changes to VED, company car tax, capital allowances, and more
Here’s a summary of how the March 2013 Budget affected motorists, including changes to Benefit In Kind (BiK) tax levels for Electric Vehicles (EVs)
Company Car Tax and EV BIK
Benefit In Kind (BiK) tax levels on Ultra Low Emission Vehicles (ULEVs) – including Electric Vehicles (EVs) – with 0-50g/km CO2 emissions, will remain at five per cent in the 2015-16 tax year (rather than 13% as previously announced), rising to seven per cent in the 2016-17 tax year.
From April 2015 there will be the introduction of two new bands at 0-50 g/km of carbon dioxide (g/km CO2) and 51-75 g/km CO2. There is also a change to the rules in that in future years CCT rates will be announced three years in advance.
Capital allowances for ULEV business cars
In last year’s Budget, the Chancellor announced that the 100% First Year Allowance would be extended until 2015 for cars emitting 95 g/km CO2. The Chancellor has now announced a further three year extension until 2018 for cars emitting 75 g/km CO2 or less. This will maintain the financial incentive for businesses to purchase ULEVs.
Vehicle Excise Duty
From 1 April 2013, VED rates will increase in line with RPI, apart from for heavy goods vehicles (HGVs) which will be frozen in 2013-14. The government has said that it has no plans to make signiﬁcant reforms to the structure of VED for cars and vans in this Parliament.
There will also be an extension to the cut-off date from which classic vehicles are exempt from VED by one year; from 1 April 2014 a vehicle manufactured before 1 January 1974 will be a classic exempt from VED.
Reduced Pollution Certificates VED discounts for Euro VI vehicles are due to expire on 31 December 2016. The Government will replace RPC VED discounts with grants for Euro 5-6 vehicles within the HGV Road User Levy scheme, from 1 April 2014 to 31 December 2016.
The 1.89p per litre fuel duty increase that was planned for 1 September 2013 has been cancelled. It means that fuel duty will have been frozen for nearly three and half years, the longest duty freeze for over 20 years.
Research and Development (R&D) tax credit
In the Autumn Statement 2011, government announced it would introduce an Above the Line (ATL) tax credit for large company R&D expenditure incurred on or after 1 April 2013. The Budget increases the ATL credit to a rate of 10% before tax.
Government to provide £1.6 billion of funding to support sector strategies, including automotive, during the course of 2013.
From the SMMT https://www.smmt.co.uk/