Tax: key points of the Budget 2007

Biofuel Saab – qualifies for 2% discount

The Chancellor has signified that he wants business motoring to have a reduced environmental impact.

The broad thrust was to impact on business car costs for those vehicles with higher emissions; and reduce business car costs for those with lower emissions. The key points to consider are these:

Vehicle Excise Duty (for cars registered from March 2001)

• Raised VED for band G cars (226g/km CO2) to £300 in 2007-08; and £400 in 2008-09. Change from 22 March 2007
• Cars in band A (below 100g/km CO2) continue to attract no VED
• Cars in band B (101g/km to 120g/km) receive VED reduction: petrol/diesels pay £35; alternative fuel £15
• Cars in bands C-F: harmonisation of petrol/diesel VED prices

Approved Mileage Allowance Payments (AMAPs)

• Decision deferred. But likely outcome is change to current 40p / 25p rates and the mileages at which they can be claimed. This is important: many small businesses use AMAPs to claim for business mileage undertaken in their private cars.

Fuel duty rates

• Increased by 2p per litre from 01 October 2007
• Further increases of 2ppl in 2008-09; and 1.84ppl in 2009-10
• Current 20ppl biofuel differential extended to 2009-10

Company Car and Fuel Benefit Tax