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Government to hold summer Budget on 8 July

Date: 18 May 2015   |   Author:

George Osborne

Chancellor George Osborne will deliver a new Budget on 8 July.

Osborne said he didn't want to wait to "deliver on commitments we have made to working people".

The new Budget will reveal further policy plans and could include details of how the UK will tackle air quality targets.

The Government has been ordered to take severe action on improving air quality by the end of this year, after the Supreme Court, the final appeal court in the UK law, ordered that it must submit plans by 31 December, 2015.

The plans will need to include measures to cut NO2 levels, which some experts blame on diesel vehicles.

This was followed by Osborne's announcement to give cities with an elected mayor powers to control transport, planning, housing and skills.

Some in the industry believe this could lead to cities introducing their own congestion charge zones to tackle air quality targets.

The Government's last budget was on 18 March and included changes to company car tax and included measures to increase investment in driverless cars.

Company car drivers are facing a larger benefit-in-kind jump in the 2019/20 tax year, after the chancellor used the 18 March 2015 Budget to announce a 3% rise for all but the lowest-emission vehicles.

The chancellor's figures show that the increase will cost company car drivers an additional £340m in tax.

Having endured annual 2% rises from 2014/15 through to 2018/19, rather than the previously traditional 1%, the rise will be 3%, meaning drivers of cars between 76-94g/km, the lowest conventionally fuelled vehicles can currently achieve, will pay a benefit-in-kind rate of 22%, compared to their current level of 11%.

In a slight change from previously announced policy, the chancellor claimed in his speech that to "encourage a new generation of low emission vehicles", the Government would "increase their company car tax more slowly than previously planned, while increasing other rates by 3% in 2019-20."

Though the rates will increase in line with regular vehicles, this is different to what was announced last year when the gap from 51-75g/km and 76-94g/km bands, and sub-51g/km and 51-74g/km was supposed to close from 3% to 2% in 2018/19, when this will now remain at 3% until at least April 2020. 

Despite this claim, the BIK bands for low-emission vehicles appear to be rising in line with all other bands, with 0-50g/km cars taxed at 16% BIK for 2019, and 51-75g/km vehicles at 19%.

The changes mean the top band, which remains 37%, will account for all cars over 164g/km from April 2019.