Budget 2007

The 2007 Budget and what it means to company car drivers.

Here are the key extracts relating to company car drivers.

Income tax - Company cars

• No immediate changes announced here. The 2008-09 levels previously announced will also apply to 2009-10.
• Once the requirements and regulations for Euro V emissions are in place by the end of 2007, it is possible that incentives will be put in place for uptake of such vehicles prior to it becomong mandatory in 2011.
• Vehicles capable of using high-blend bioethanol will have a 2 per cent discount from April 2008. SAAB and Ford already have some E85 models

Income tax - Fuel scale benefit charges

The current level of benefit based on the CO2 percentage of £14,400 will continue for 2007/08.

VED

VED is going to become more graduated, with Band B moving to just £35, and the scale increasing to a maximum of £300 now and £400 in April 2008. In most cases there will be no impact on P11D prices, although all On-The-Road car prices will change. Some P11D prices may fall as car manufacturers seek to keep the OTR prices inclusive of VED below key price points (such as £19,999). Try the Select by CO2 to pick cars by band.

Fuel duty

Fuel duty will rise by 2p on 1st October 2007, another 2p on 1st April 2008, and 1.8ppl on 1st April 2009. These are to keep in line with inflation rather than restart the price escalator. The Chancellor calculates that fuel duty rates are 11% lower in real terms today than they were in 1999.