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Chancellor George Osborne delivers some good news for motorists

Chancellor George Osborne pulled a few scraps of good news for motorists from his red budget briefcase on Wednesday. The first piece of positive news was the widely anticipated confirmation that fuel duty will again be frozen, this time until the spring of 2015. A rise had been scheduled for November but this will now be cancelled.

Chancellor George Osborne pulled a few scraps of good news for motorists from his red budget briefcase on Wednesday. The first piece of positive news was the widely anticipated confirmation that fuel duty will again be frozen, this time until the spring of 2015. A rise had been scheduled for November but this will now be cancelled. Mr Osborne highlighted that the freezing of fuel duty had so far made petrol 20 pence per litre less expensive than it would have been with the previous Government’s policies in place.

This good news, however, was immediately offset by the announcement that vehicle excise duty would increase in line with inflation. This means that cars in band D and upwards will see an increase in road tax of at least £5. The Chancellor did have some other positive announcements about vehicle excise duty. He confirmed that car owners will be allowed to pay for their vehicle excise duty monthly, biannually or annually from October this year. Continuing his theme of both giving and taking when it comes to car tax, Mr Osborne then announced that the balance of any vehicle excise duty already paid on a car will not be transferrable when it is sold.

News of an additional £200 million fund for councils to fix potholes was given a cautious welcome by the Institute of Advanced Motorists (IAM). Neil Greig, IAM’s policy and research director said: “Every little helps and it will be welcomed in many areas hit by this year’s bad weather. With a ten billion pound back log in repairs, however, it is only through consistent long-term funding that the pothole problem can finally be fixed.”

The exemption of classic cars from vehicle excise duty continues. The new rule exempts cars more than 40 years old on a rolling basis. The exemption used to have a rolling 25 year period but this was scrapped in 1997 in favour of a fixed date, with cars registered before 1973 being exempt. The rolling 40 year limit is certainly more generous and will potentially increase the value of cars falling into this category. The new rule will also have the more dubious effect of making cars like the Austin Allegro or Reliant Robin fall into the ‘classic’ car category. On the positive side, the MGB V will now be exempt from tax, a car which more comfortably falls within the ‘classic’ category.

As might be expected, the Chancellor has given with one hand and taken away with the other. Inevitably there will be winners and losers and some of the winners will be driving Allegros.

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