The Chancellor continued with his promise to improve the environment by attacking diesel cars and vans and by encouraging electric vehicles. As well as giving further grants for electric charging points, it was announced that there will be no benefit in kind if employees are allowed to charge their cars at work.
Diesel car users will see an increase in their taxable benefits, as the 3% supplement (the amount they already pay over and above non-diesel users) increases to 4% if the vehicle is not certified to Real Driving Emissions 2 (RDE2) standard. Combined with this will be higher road tax, as all diesel cars acquired after 1 April 2018 will be treated as one band higher when calculating Vehicle Excise Duty if the RDE2 is not satisfied.
Not all diesel users will suffer, however, as those who drive a car that is certified to RDE2 standard will see the diesel supplement removed altogether.
There are no big changes to the van or fuel benefit charge, which will increase in line with the retail price index as anticipated.
Users of zero emissions goods vehicles will be pleased to see the 100% First Year Allowance being extended by a further three years ending 2021. The same applies to gas refuelling equipment. This means that businesses acquiring qualifying vehicles or equipment may write off the whole cost against their taxable profits in the year of purchase.