CAR TAX CHANGES 2021

The long-dreaded fuel duty increase

Despite Boris Johnson promising he had “no intention” to raise fuel duty ahead of the 2019 election, there are rumours abound that after a ten-year freeze, fuel duty could rise by between 1-2p in the Chancellor's next budget, raising the cost of driving for almost everyone. Successive freezes since 2011 are thought to have cost the Treasury over £100billion, but the predicted rise from 57.95p to 58.95p or 59.95p, could raise between £250 to £470million.

However, such measures would impact low-income drivers the most, with the poorest 10% of motorists spending proportionately twice as much of their disposable income on fuel as wealthier groups. This would mean that such an increase will have a disproportionate impact on those who can afford it least.

Increasing Vehicle Excise Duty (VED)

An increase in VED is nothing new, vehicle excise duty creeps up year by year, normally rising with inflation, which as of January 2021 was 0.7%. While there's no reason why 2021 would be any different, and we won't know for certain of this year's rise until the announcement of the budget in March, if the r...