What does the budget mean for drivers?

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The chancellor announced a number of measures, including freezing fuel duty and increasing vehicle excise duty for diesel car owners.

Diesel Car

The sale of new diesel cars that fail to meet the latest European emissions standards will be subject to a tax increase from April.

The tax doesn’t apply if you’ve bought a diesel car in the last few years – only on those bought from April.

Diesel cars will be levied on one band higher than petrol cars, because of diesel’s environmental impact. This will mean a real-world cost of £20 for small cars and £300 for large cars.

Currently diesel cars are subject to a sliding scale in the first year, and afterwards are charged tax of £140.

The rise will affect cars only, and not vans.

Clean Air Fund

As well as a diesel tax, the chancellor also announced a freeze on fuel duty. The chancellor spoke for the first time about a new Clean Air Fund – totalling £220m – and pledged to spend £400m on improving the charging infrastructure for electric vehicles.

No IPT rise

The chancellor avoided increasing IPT (insurance premium tax), leaving it at the current 12%.  Insurers welcomed the news.

Admiral CEO David Stephens said: “The government had already doubled IPT from 6% in 2015 to 12% this year and any further increases would have been unacceptable.

“IPT on car insurance premiums in particular is a uniquely regressive tax. It hits hardest those motorists who can least afford it, for example younger drivers who are a higher risk and therefore pay higher premiums.”

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