The Chancellor of the Exchequer, Rishi Sunak unveiled his Spring Statement in the House of Commons today. We summarise below the key measures that have been announced that impact on motorists:
Fuel duty cut by 5p per litre
The change takes place from 6pm tonight (23 March) and will remain until March 2023. The Government estimates this will save the average car driver £100 and van driver £200 over the period. In recent days petrol and diesel prices have stabilised at an all time high. It is hoped that renewed efforts to improve global oil supplies will help bring down fuel costs over the coming months.
National insurance (NI) primary threshold to be raised to £12,570 from July 2022
The Government will be equalising the NI free allowance with the income tax personal allowance of £12,570 from July 2022. They state this will provide a typical employee with a saving of £330 a year and lead to 70% of workers being better off – even after the increase to personal NI rates from April.
Basic rate of income tax to fall to 19% in 2024
Of course this won’t help motorists now but does provide financial assistance to most workers running vehicles in future. This will be the first time Government lowers the basic rate of income tax since 2006. The longer term measure forms part of a new tax plan to help lower taxes and increase investment and productivity in the economy before the next general election in May 2024.
What about vehicle excise duty?
Last year the Government announced that vehicle excise duty (road tax) would increase from April 2022. This decision has not been reversed as a result of the cost of living crisis. The new rates can be found here.
