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BUDGET 2017: Diesel drivers dodge higher taxes…for now

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Diesel drivers may not have been hit as expected by the year’s Budget, but the direction of travel was clear.

A new Vehicle Excise Duty (VED) supplement will apply to new diesel cars first registered from 1 April 2018. Their first-year rate will be calculated as if they were in the VED band above.

There will also be a rise in the existing Company Car Tax diesel supplement from 3% to 4%, with effect from 6 April 2018.

Neither of these measures will apply to next-generation clean diesels – those that conform to ‘real world’ driving standards.

At the same time, incentives for ‘green’ drivers increased. The government will also ‘clarify the law’ for motorists charging electric vehicles at work so it isn’t charged as a benefit in kind.

The government has set aside £200m to promote the roll out of electric charging points, plus £100m to guarantee continuation of the Plug-In Car Grant to 2020 to help consumers buy a new battery-powered electric vehicle.

The Chancellor said he would like to see fully self-driving cars, without a human operator, on UK roads by 2021. To do this he plans to make changes to the regulatory framework, such as setting out how driverless cars can be tested without a human safety operator.

Elsewhere, VED will rise in line with RPI (currently 4%). The Heavy Goods Vehicle (HGV) VED and Road User Levy will be frozen from 1 April 2018. The government plans to work with industry to update the HGV Road User Levy so that it rewards hauliers that plan their routes efficiently, to encourage the efficient use of roads and improve air quality.

Related: See’s Is it worth buying a diesel car? for more information.

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