The first Budget delivered yesterday shows that motorists will pay dearly thanks to a massive increase in the VAT rate
The first Budget delivered yesterday shows that motorists will pay dearly thanks to a massive increase in the VAT rate. The VAT rate will change from 17.5% to 20 % and will take effect from the 4th January 2011.
The 2.5% rise will have a marked effect on the price of new cars and with the VAT increase applying to fuel all motorists will be affected. Commuters and business users covering high mileage will be hardest hit. The Chancellor stated that his Government is 'looking into' earlier plans to put in place a method of stabilising fuel prices. This is against a background of variations in the price of a barrel of oil.
In a bid to assist business, the corporation tax rate will be cut by one percent per annum, which should encourage foreign investment and will help the UK motor manufacturing industry. There was no mention of new grants for electric vehicle purchase or of road charging.