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How the Budget affected UK motorists

A few weeks ago, Chancellor George Osborne unveiled the 2015 Budget. There were a number of important announcements for UK drivers and the motor trade industry in general, with several of the key points outlined in this article. There was also praise for the vehicle manufacturing industry as a whole and promise of aid for HGV firms and drivers.

1. Fuel duty rise scrapped

The proposed September 2015 rise of 0.54p per litre has been scrapped, making this the fifth successive year that fuel duty increases have been put on hold. With wholesale oil prices falling fast, drivers are now paying an average of almost 20p per litre less than 12 months ago, saving on average around £11 per tank of fuel. The continued freeze on fuel duty is another plus, both for drivers and for haulage firms who will be correspondingly tens of thousands of pounds better off than a year ago. Drivers of economical new and used cars should be much better off.

2. Cheap petrol for remote regions

17 areas of the UK will receive a rural fuel rebate of around 5p per litre; this specifically applies to retailers and rural garages that do not benefit from the same prices as urban areas. There is however no statute to say that such rebates need to be passed to the motorist. However the government has indicated that it will monitor pump prices to ensure that motorists continue to benefit from wholesale price reductions.

3. Road and highway investment

The Chancellor reported that 16 schemes at a cost of around 2.3 billion pounds are underway to improve roads and infrastructure across the UK, with a further 15 schemes completed at a cost of £3.4 billion. Strategic roads affected by the upgrades include the A1, the M1 and the cross-Pennine M62. Public spending on transport will amount to a further £29 billion will be implemented during the 2015/16 tax year, affecting roads, rail and other transportation systems.

4. Road tax

The cost of vehicle excise duty (VED or road tax) has risen in line with inflation; this applies to cars, motorcycles, vans and those using trade plates. Classic cars registered before January 1st 1976 are now exempt from VED as they meet the 40 year rolling deadline for exemption. It isn’t confirmed whether the rolling exemption will continue going forward, and there are no changes to the insurance policy required for such cars.

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5. Company car tax

Businesses are coming under increased pressure to upgrade their fleets to more fuel efficient and environmentally friendly vehicles. Referring specifically to 2019/20, rates for higher emission vehicles will increase by 3%, while ultra-low emission cars and vans will see far smaller rate increases than previously announced.

6. Driverless and electric cars

Investment totalling £100 million was announced to continue the development and integration of driverless vehicles. The Chancellor also reminded the public that in February 2015 a £10 million prize was announced for manufacturers who could develop an ultra-low emission vehicle battery that would be of great commercial viability.

7. Severn Bridge toll cuts

The long-standing toll for crossing the M4 Severn Bridge between Wales and England is set to be cut, with some ministers suggesting that this fee will be eventually removed entirely. This reduction of the so-called “Welsh Tax” was a welcome, and surprise, announcement.


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