Thursday 21st March 2013

Budget 2013: A PHer's Guide

Fuel duty rise and SORN renewals scrapped; road tax exemption extended

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In among the reams of information announced in the chancellor’s budget today, there were a few tidbits of good news for the money-conscious PHer.

Fuel duty frozen; VED on 1973 cars scrapped

The biggest news of all was that the 3p per litre fuel duty rise, which has been postponed for several years and was due to kick in this autumn, will now be cancelled altogether. To put that into context, 10,000 miles of average fuel consumption in a manual Porsche 911 Carrera S will cost £46 less than it would have done, assuming today’s average fuel prices. The Treasury also adds that prices today are 13p per litre cheaper than they would have been under previously-announced plans.

There was more good news for enthusiast motorists, too, with the announcement that the Government’s cut-off date for classic cars’ VED exemption will now be extended by one year, meaning cars produced in 1973, like the gorgeous Ferrari 365 GTB above, will now be tax exempt. There’s no word yet on whether this extension will continue to roll forward in future years, though.

One other significant change for motorists is that SORN declarations will no longer have to be renewed each year. From now on, all SORN applications will be open-ended, and as such will apply until the car’s tax is renewed. What’s more the grace period for failing to display a tax disc once purchased has been extended to 14 days.

[JaguarsportXJR]

If that's all there is from the motorists point of view, it could have been worse.

[Meths]

That's quite good.

Am I right in saying that, because of the fuel duty freeze, the amount of tax we pay on fuel is getting lower because of inflation?

Edited by Meths on Wednesday 20th March 16:01

[Krikkit]

There are other minor changes to company car tax and the introduction of new tax bands for ultra-efficient vehicles, but that's not very PH.

[MX7]

I think the SORN is a definite improvement. I suspect that the annual renewal was more about revenue than anything else.

[blongs]

I read

"Other transport taxes
2.146 VED rates and bands
– From 1 April 2013 VED rates will increase in line with RPI, apart
from VED rates for heavy goods vehicles (HGVs) which will be frozen in 2013-14. (Finance Bill
2013). The Government has no plans to make significant reforms to the structure of VED for
cars and vans in this Parliament. (58)"


I think this is about £5 per vehicle

http://www.honestjohn.co.uk/news/tax-insurance-and...

[JaguarsportXJR]

Meths said:

That's quite good.

Am I right in saying that, because of the fuel duty freeze, the amount of tax we pay on fuel is getting lower because of inflation?

Edited by Meths on Wednesday 20th March 16:01

The amount is the same but the value is less, technically.

[04mmurkett]

And beer is cheaper! PH-worthy beer news.

[Lax Power]

I bet Ferrari Daytona owners are really relieved

[louismchuge]

'73 classics have just gone up a few quid then!

[mk1matt]

Can someone (hopefully) clarify the following?

If a car is currently SORN, does its status automatically become open-ended, or is it only new applications from now on?

[Negative Creep]

Although I can't complain, it does seem a bit pointless to move the exemption by one year.

[suffolk009]

I can hardly wait for five years from now (assuming that they keep the classic tax-free rolling) then the Midget will become tax free.

Sadly it'll be 2030 before the MX5 is similarly exempt.

[madbadger]

Negative Creep said:

Although I can't complain, it does seem a bit pointless to move the exemption by one year.

Rounds it off to 40 years. Maybe will become a rolling date again?

[suffolk009]

Negative Creep said:

Although I can't complain, it does seem a bit pointless to move the exemption by one year.

Hopefully what started as an exemption at 25 years and rolled on for a while before getting frozen, will keep rolling for cars at 40 years old. Fingers crossed anyway.

[The Wookie]

Get in! My 1973 MGB has just gone up in value!

[R500POP]

Krikkit said:

There are other minor changes to company car tax and the introduction of new tax bands for ultra-efficient vehicles, but that's not very PH.

Any further details on this yet?

[Agent Orange]

PH said:

To put that into context, 10,000 miles of average fuel consumption in a manual Porsche 911 Carrera S will cost £46 less than it would have done, assuming today’s average fuel prices.

Putting that into context fuel costs, and therefore MPG, are a trivial cost in the total cost of ownership of a car. Depreciation being the biggest. Therefore don't buy new cars.

PH said:

The Treasury also adds that prices today are 13p per litre cheaper than they would have been under previously-announced plans.

[bakerstreet]

One year on the VED exemption? I actually think that is a bit pathetic. I thought the system was originally introduced when vehicles were 25 years old and that was obviously years ago.

I suppose we should be grateful considering what they have done with the fuel duty. However, I suspect its still going to go up anyway and £1.50+ will be the norm in 12 months time.

[SMGB]

If they do roll the VED exemption forward it means cars will be 40 years old before they benefit. This would impact the value of cars becoming due in the next year or so as well. I can't see many people thinking, what ho I've just forked out £NNN for whatever but I will get all that back in 40 years time when I sell it as a VED exempt classic. So I think anything that survives that long will either be desirable, or maybe be one of those owned for decades "kerbside classics" you see in daily use. There is a Morris Ital in regular use around here and I think it's really funny that it will be a tax free classic now, but then it's part of our motoring heritage as well and a rarer survivor than a 308.

[k-ink]

Good news regarding freezing the VED. I was expecting my pre-2005 car to go up massively. Sigh of relief!!