Budget 2010 car tax news
R Russell

So far we haven't uncovered any motoring changes from the Pre-Budget Report and previous announcements, other than the slowing down of the fuel duty increase and the new 5% rate for sub 76gCO2pkm cars.

Ultra-low carbon cars, being those with tailpipe emissions of between 1 and 75gCO2/km will be taxed at just 5% for the next five years. None exist at the moment, but plug-in hybrids such as the Vauxhall Ampera will be available in 2012.

Otherwise there was confirmation of previous announcements: Company car tax will continue to tighten so that from April 2012 petrol cars will need to have sub 100g CO2/km to be taxed at 10%, rising 1% for every 5g more. There is no longer a discount for hybrids, and diesels will continue to be taxed at an additional 3%. So far there is no sign of any discount for early achievement of the Euro 6 emission standard. Meanwhile the government is looking to electrification as a way of reducing carbon from road transport, so electric cars will be exempt from company car tax for 5 years commencing April 2010.

The fuel benefit multiplier which is currently set at £16,900 will rise to £18,000 from April 2010. Van drivers will see a £50 increase to £550 at the same time. More drivers should consider rejecting this benefit, and the fuel benefit calculator is there to help calculate the breakeven point for this year and next.

Both employee and employer NICs will increase by 1% from April 2011. Company car drivers won't be affected, but their employers will then have to pay Class 1 NICs of 13.8% of the benefit value. Those who take an allowance instead of a company car will also have their allowance reduced by a further 1% when the NI rates increase.

Main road fuel duty will rise by 1p per litre on 1 April 2010 and on1st October 2010 with a 0.76p rise on 1st January 2011.