Fuel duty
Fuel duty will be frozen for an eighth year in 2018-19. Fuel duty freezes since 2011 will have saved the average driver a cumulative £850 by April 2019, compared to what they would have paid under the pre-2010 escalator plans.
The government will review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018. In the meantime, the government will end the fuel duty escalator for Liquefied Petroleum Gas (LPG). The LPG rate will be frozen in 2018-19, alongside the main rate of fuel duty.
Vehicle Excise Duty (VED)
From 1 April 2018 VED (commonly known as car tax) rates for cars, vans and motorcycles registered before April 2017, and the First-Year Rates for cars registered after April 2017, will increase in line with RPI. However, the Heavy Goods Vehicle (HGV) VED and Road User Levy rates will be frozen from 1 April 2018. A call for evidence on updating the existing HGV Road User Levy will be launched and the government will work with industry to update the Levy so that it rewards hauliers that plan their routes efficiently, to encourage the efficient use of roads and improve air quality. Also focussing on improving air quality, a new VED supplement will apply to new diesel cars first registered from 1 April 2018, so that their First-Year Rate will be calculated as if they were in the VED band above. This will not apply to next- generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards.
Zero-emission capable taxis will be exempt from the VED supplement that applies to expensive cars from April 2019. The government intends consulting beforehand to determine how such taxis should be defined.
National Insurance contributions (NICs)
Policy delays
As previously announced, to ensure that there is enough time to work with Parliament and stakeholders on the detail of reforms that will simplify the NICs system, the government has announced that it will delay implementing a series of NICs policies by one year. These are the abolition of Class 2 NICs, reforms to the NICs treatment of termination payments, and changes to the NICs treatment of sporting testimonials, which will all now take effect from 6 April 2019.
Class 4
As announced earlier this year, the government will no longer proceed with an increase to the main rate of Class 4 NICs from 9% to 10% in April 2018, and to 11% in April 2019.
Employment Allowance
The government has found evidence of some employers abusing the Employment Allowance to avoid paying the correct amount of NICs, often by using offshore arrangements. To crack down on this, HMRC will require upfront security from employers with a history of avoiding paying NICs in this way. This will take effect from 2018 and is predicted to raise up to £15 million a year.
National Minimum Wage/National Living Wage
Alongside the Budget the government response to the Low Pay Commission’s Autumn 2017 report was published, accepting the following recommendations:
Hourly rates should increase in April 2018:
from £7.50 to £7.83 for workers aged 25 and over (the National Living Wage) from £7.05 to £7.38 for 21-24 year olds from £5.60 to £5.90 for 18-20 year olds from £4.05 to £4.20 for 16-17 year olds from £3.50 to £3.70 for apprentices aged under 19 or in the first year of their apprenticeship.
The daily accommodation offset rate will increase from £6.40 to £7.00 (weekly £49.00)
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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