Fuel duty will remain frozen until the end of this Parliament.
Vehicle Excise Duty (VED)
It was announced in the Autumn Statement that, with effect from 1 October 2014, motorists will be able to spread their VED payments monthy or bi-annually by paying via direct debit. There will be a 5% surcharge for those choosing to pay by these methods.
Annual payment by direct debit will also be available, at no extra charge.
From 1 October 2014, the paper based VED licence (‘tax disc’) will also be abolished – police will rely on the DVLA electronic database to make sure that vehicles are taxed.
Business mileage payments
HMRC sets an approved mileage allowance payment (AMAP) rate. This is the rate at which employers may reimburse business mileage tax free.
Businesses with a turnover of less than the VAT registration threshold (£79,000 from April 2013) can also choose to claim a tax deduction for their vehicle costs at the AMAP rate, rather than recording all vehicle expenditure and claiming the actual costs.
The AMAP rate will remain at 45p for the first 10,000 miles per annum and 25p per mile for any excess.
Car benefits are based on a percentage of the list price of the car. The percentage depends on the CO2 emissions of the vehicle.
As usual, the increases to the percentages were announced, so that a higher percentage is payable for each CO2 band. So, for example, a car with 50g CO2 emissions has a multiplier of 7% in 2016-17, 9% in 2017-18 and 13% in 2018-19. One with 180g emissions is 33%, 35% and then 37%.
The van benefit in kind charge will increased from £3,000 to £3,090 for 2014-15.
The base figure for calculating the benefit where private fuel is provided alongside a company car will increase to £21,700 (from £21,100) with effect from 6 April 2014.
The van fuel benefit charge multiplier will be £581 (increased from £564) for 2014-15.