Chancellor George Osborne has announced the 2016 Budget. Here’s how it will affect classic and modern motorists.
The annual budget announcement by Chancellor of the Exchequer George Osborne, and among the big news surrounding fuel duty and tax increases, some key announcements for car drivers and classic owners, including the confirmation of the rolling 40-year tax exemption.
Big news for many is that fuel duty has once again been frozen – making this the sixth year in a row. Due to a fall in fuel prices over the last year, it was thought that a rise in line with inflation would be announced, however Osborne claims that the freeze could save the average driver £75 a year.
Like last year, the government has announced a further increase in the Insurance Premium Tax. This is the tax applied to an insurance premium, and the first rise announced in the 2015 Autumn statement (from 6% to 9.5%) has been blamed by many as the reason behind rising car insurance premiums this year. This year, the IPT has been pushed up a further 0.5% to 10%.
Classic car owners are a small minority when it comes to road users, but this year enthusiasts have not been forgotten. The current rolling tax exemption has been confirmed, meaning cars turning 40 years old this year will once again be granted tax exemption as of April 1 2017.
As of last year’s announcement, the 40 year tax exemption was announced on a year-by-year basis, however within the announcement were plans to finally legislate for this to become permanent rolling exemption as of next year.
As it stands today, cars that turned 40 years old as of 1 January 2016 will now qualify as tax exempt on 1 April. If you want to read more about classic car tax exemption rules in the UK, read our guide on the subject here.