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A Vehicle Excise Duty (VED) supplement will apply to new diesel cars first registered from 1 April 2018, so that their First-Year Rate will go up by one band. This will not apply to next-generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards (RDE step 2 will apply in January 2020 for new types and then from January 2021 for all types). New rates will only apply to cars, not vans or goods vehicles.
NFDA believes that the higher tax on first registration of all diesel cars which are not certified by the Real Driving Emissions will disproportionately affect many motorists who will be looking to purchase the most efficient vehicle to suit their driving habits. In many cases, Euro 6 diesel cars still represent the most efficient and affordable vehicle.
The Chancellor said that he “will once again cancel the fuel duty rise for both petrol and diesel that is scheduled for April”. It was positive and highly beneficial for motorists and consequently the whole retail automotive industry that the rise in fuel duty for petrol and diesel was cancelled. We are pleased to see that the Treasury took NFDA’s recommendations into consideration as we had explicitly asked for the fuel duty freeze ahead of the Budget.
Further funds and tax incentives for electric car drivers were announced. These will include a new £400m charging infrastructure fund, an extra £100m in Plug-In-Car Grant, and £40m for research into charging. Also, electric cars which are charged at work will not incur benefit in kind.
The continued commitment from the Government to supporting the uptake of electric vehicles is extremely encouraging. This remains crucial if the Government wants to eliminate all petrol and diesel cars by 2040 as pure electric vehicles currently only represent 0.1% of the UK’s car parc.
NFDA is hoping that part of these funds will go towards upgrading national and local grid and we will be looking into the issue to ensure that costs of upgrades are not pushed onto private businesses and local authorities.
The NFDA will now look at the Budget in detail and analyse the full impact that its measures may have on our members.