VED up in Budget, van benefit charge unchanged

13th April 2012

Vehicle Excise Duty for light goods vehicles has increased in line with the inflation, following an announcement in the Budget.

• Registered on or after March 1, 2001 (not over 3,500kg revenue weight) - £215
• Euro 4 light goods vehicles registered between March 1, 2003 and December 31, 2006 only (not over 3,500kg revenue weight) - £135
• Euro 5 light goods vehicles registered between January 1, 2009 and December 31, 2010 only (not over 3,500kg revenue weight) - £135

In addition, the Chancellor said he was planning to introduce a direct debit option for VED payments, and will consider whether to reform VED over the medium term to reflect continuing improvements in vehicle fuel efficiency.

Meanwhile, the van benefit charge has been frozen at £3,000 in 2012/13.  It applies to van operators using a commercial vehicle (including pick-ups) with a 1,000kg+ payload for private as well as business use.  Those on the 20% basic rate of income tax will pay £600 and those on the 40% rate £1,200.

The van fuel benefit charge multiplier has been frozen at £550, but will increase by the RPI in 2013/14.  The Government has also committed to pre-announcing the FBC multiplier one year ahead.

HM Treasury has confirmed that the previously announced reduction in the main rate of capital allowances on plant and machinery, which includes vans, will come into effect for the 2012/13 financial year with rates frozen for 2013/14.

From April 2015, the five-year exemption for zero emission vans from the van benefit charge will expire.