Budget Review 2011

The 2011 Budget on 23rd March 2011 and what it means to company car drivers.

Income tax - Company cars

To encourage businesses to use ultra low carbon cars, the Government will freeze Company Car Tax for cars emitting less than 95g/km from April 2013. The Government will increase Company Car Tax for all vehicles with carbon dioxide emissions between 95g/km and 219g/km by 1 percentage point from the same date.

Otherwise there was confirmation of previous announcements:

Income tax - Fuel scale benefit charges

The car fuel benefit multiplier will increase by £800 to £18,800 from April 2011. 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.

National Insurance Contributions

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.

VED

Vehicle excise duty rates will increase by RPI indexation only in 2011-12, and rates for Heavy Goods Vehicles will be frozen

Fuel duty

Main road fuel duty will be cut by 1p per litre from 6pm 23rd March 2011. This is instead of an expected 5p increase. In addition, to ease the burden on motorists, the 2011-12 inflation-only increase in fuel duty will be deferred to 1 January 2012. The 2012-13 increase in fuel duty will be implemented on 1 August 2012.

AMAPS

Increase by 5p to 45p for the first 10,000 miles and remain at 25p thereafter .In addition to claiming AMAPs rates, an allowance for passenger payments currently in place for business employees, at 5 pence per passenger per mile, will be extended to volunteers.