Tuesday 22nd June 2010

Motorists Get Off Lightly In Emergency Budget

VAT increase will be the only big hit on the pockets of the nation's drivers

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Motorists escape heavy 'tolls' in Budget

The Chancellor's emergency Budget has been relatively lenient on motorists, with no significant rises in fuel duty.

Curiously, the rumoured VED hikes for high CO2-emitting cars also don't appear to have materialised.

Car buyers will be hardest hit by a rise in VAT from 17.5 per cent to 20 per cent, a move that will increase the costs of new and used cars, and inflate servicing, maintenance and fuel costs. The VAT increases won't be introduced until January 2011, however.

There may yet be hidden pain for the nation's drivers, however, as Chancellor George Osborne didn't reveal how the government plans to shave £683m from the Department for Transport's budget. That could yet come from the scrapping of road building and maintenance plans - though we'll no doubt find out for sure when the full details of the Budget are made available.

[drewcole81]

Very Good, i'm happy that VAT went up... at least it will have to be paid by all.

[thatone1967]

Could have been a whole lot worse..... maybe they are trying to be "non motorist hating" like Labia...

[SystemParanoia]

to remove 683 mil from budget.. scrap all busses, allow everyone to use bus lanes.

instants congestion ease, and taxis will recieve a boom in income too

[pelliott]

Isnt this only the first of many new cuts and taxes to be introduced? To save just £6 billion out of £150 BILLION? I could and probably am wrong.

But worse is yet to come for everyone.

[reddragon]

Would have been nicer if they had reduced fuel duty in respect of the rise in VAT to avoid the fuel cost going up again still.

[nsmith1180]

Pritty good news really, in the short term. He'll probably kick the motorists butt next year!

Oh and PH? How does a VAT rate increase put up the cost of used cars? VAT is only payable if the tax has been claimed back, so the vast majority of used cars wont change much. Its the dealers that will suffer here because they pay VAT on profit.

[mrmr96]

SystemParanoia said:

to remove 683 mil from budget.. scrap all busses, allow everyone to use bus lanes.

instants congestion ease, and taxis will recieve a boom in income too

I assume that's a joke.

[FactoryPilot]

It's a sensible budget to deal with real problems.

I am just so thankful Labour did not get in again...

[juansolo]

Easy way to save money. The old chestnut of abolishing road tax and sticking it proportionally on fuel. Huge swathes of DVLA infrastructure could be culled. It's save millions and cost nothing to implement. Not to mention all the other upsides that have been mentioned before: You can't not pay it (so no need for SORN or chasing down non-taxed vehicles), you have a more economical car or a classic/sports that's used infrequently you pay less, you drive something thirsty or do huge miles (hence using the road infrastructure, creating pollution/congestion) you pay more. It's the only truly fair way of doing it. It even gets the foreign drivers who get to dodge this currently.

The only downside is it would almost certainly result in a lot of people losing their jobs in the DVLA. Then again we are paying for them and they actually serve no real neccessary purpose at all. Like a lot of civil service jobs to be fair that have been created over the years.

Edited by juansolo on Tuesday 22 June 17:38

[leon9191]

FactoryPilot said:

It's a sensible budget to deal with real problems.

I am just so thankful Labour did not get in again...

Your an idiot if you really think that, the Tories and Lib dems both said they would NOT! put VAT up before the election, two months later that turns out to be a lie (1st of many i would guess).

They have robbed peter to pay paul, cut front line services when they said they wouldnt (again) and In one move increased the price of everything.

And they have cut 25% (over 4 years) out of the health budget, I would start eating ur greens cause I wouldnt want to be sick over the next few years.

[ray951]

Of course the reason why he didn't announce a rise in fuel duty was because it was announced in the last budget in March, and as far as I am aware he hasn't cancelled it.

So fuel will go up as follows:
1p on Oct 1st
0.76p on Jan 1st and then
2.6p on Jan 4th due to VAT increase.
A gallon that costs £1.20 today will cost £1.246 next January.

[thesyn]

nsmith1180 said:

Pritty good news really, in the short term. He'll probably kick the motorists butt next year!

Oh and PH? How does a VAT rate increase put up the cost of used cars? VAT is only payable if the tax has been claimed back, so the vast majority of used cars wont change much. Its the dealers that will suffer here because they pay VAT on profit.

If from a trader of S/H goods I believe that VAT is chargeable on the difference between what the trader bought the item for and what he sold it for ie the added value.
I could be wrong but remember looking into this after seeing on Fleabay that VAT would be added to the final bid on some item I wanted to buy off some trader and thinking WTF

[GTRCLIVE]

Did I mention I'm glad to have moved to Canada in 07.... 5% Vat here and still only 56p a liter at the present exchange rate..... My home will always be Blighty but at present I'm glad not to be there.... all my friends at home seem be to on a downer there's a real Doom and Gloom element about the place that I've never seen before. Hope to god the Government goes in the right direction.. Fingers crossed for you all..

[nsmith1180]

thesyn said:

nsmith1180 said:

Pritty good news really, in the short term. He'll probably kick the motorists butt next year!

Oh and PH? How does a VAT rate increase put up the cost of used cars? VAT is only payable if the tax has been claimed back, so the vast majority of used cars wont change much. Its the dealers that will suffer here because they pay VAT on profit.

If from a trader of S/H goods I believe that VAT is chargeable on the difference between what the trader bought the item for and what he sold it for ie the added value.
I could be wrong but remember looking into this after seeing on Fleabay that VAT would be added to the final bid on some item I wanted to buy off some trader and thinking WTF

If a business has claimed the VAT back then its a Qualifying item and VAT must be paid at sale. If it wasnt claimed back when the item was bought new, there is no VAT to pay, its already been done. The Government takes VAT off the profit on the item, but that is nothing to do with the customer, its the seller that deals with that.

Thats why if you look at a used car invoice you will see a tiny amount of VAT, just the VAT on the Admin fees and Fuel etc. The car will be zero rated unless the previous owner claimed the VAT back on the item when he bought it.

[King Fisher]

Leon9191:

"Your an idiot if you really think that, the Tories and Lib dems both said they would NOT! put VAT up before the election, two months later that turns out to be a lie (1st of many i would guess)."

That was before they opened the books and found masses of extra debt, not declared by Labour, and also before Greece imploded.

Neither party actually wanted to raise VAT (or any other taxes in an ideal world), but desperate times mean desperate measures. The coalition has acted decisively and ignored populist measures, so I support them. I'm proud that I voted Lib Dem and will do so again without hesitation (and I'd vote Conservative as my second choice now, unlike before when it would have been Labour).

[Escort Si-130]

What an ass hole comment. What would that solve? The places the majority of bus lanes were put down were places that people would have parked. It would no revert to 2 lane carriageway as all the councils would do is reposition the centre line of the road, put double yellows and have their happy traffic wardens to slap a ticket on you.
Scrap all buses, then all the same people would just get their own car and there would be far more traffic, what a nonsense comment.

SystemParanoia said:

to remove 683 mil from budget.. scrap all busses, allow everyone to use bus lanes.

instants congestion ease, and taxis will recieve a boom in income too

[Escort Si-130]

Me too, they would have had taken another swipe at the motorist as usual.

FactoryPilot said:

It's a sensible budget to deal with real problems.

I am just so thankful Labour did not get in again...

[Escort Si-130]

No he is not,labour is the reason why we are in this mess in the first place. Good riddance to labour

leon9191 said:

FactoryPilot said:

It's a sensible budget to deal with real problems.

I am just so thankful Labour did not get in again...

Your an idiot if you really think that, the Tories and Lib dems both said they would NOT! put VAT up before the election, two months later that turns out to be a lie (1st of many i would guess).

They have robbed peter to pay paul, cut front line services when they said they wouldnt (again) and In one move increased the price of everything.

And they have cut 25% (over 4 years) out of the health budget, I would start eating ur greens cause I wouldnt want to be sick over the next few years.

[burman]

ray951 said:

Of course the reason why he didn't announce a rise in fuel duty was because it was announced in the last budget in March, and as far as I am aware he hasn't cancelled it.

So fuel will go up as follows:
1p on Oct 1st
0.76p on Jan 1st and then
2.6p on Jan 4th due to VAT increase.
A gallon that costs £1.20 today will cost £1.246 next January.

There you are, somebody is paying attention and has a good memory, if the general public was in the same class we would have a revolution, but alas apathy rules!!

[GaragedV8]

VAT applies to fuel as well... so expect a 2.5% increase in the tarrif added to the price of fuel.

I'm not sure where the VAT is applied to the fuel calculator, but the way I understood it, VAT was the last thing applied to the price of a liter of fuel.

So that makes the fuel price increasing again by about 3p. Has this skipped the PH journs notice?

Just wanted to say to all you tw*ts out there who thought the cons were going to make any difference to Whitehall policy good game.