As anyone whose been near a radio, TV or newspaper today will probably know, today was Budget day – time for the Chancellor, Alistair Darling, to set out his stall for the 2008/9 tax year. As ever (or so it seems), the focus was on the sinners – with booze, tobacco and gas-guzzling cars all easy targets for a tax hike.

But what was there for us – van drivers, operators and owners? I’ve been through the full budget document with a fine toothcomb – and it turns out that there are a few measures specifically aimed at vans that will affect us all – for better and for worse.

First, the Good News…

1. The 2p increase in fuel duty has been postponed until October.
2. From January 2009, there will be ‘VED incentives’ to purchase Euro V compliant light commercial vehicles – that’s discounted rates of road tax for cleaner new vans to you and me. Even better is that they will last for the lifetime of the van. However, no one’s saying how big these incentives will be, yet.

… and the Bad News

I’m afraid the bad looks likely to outweigh the good – for most of us, anyway:

1. The 2p increase in fuel duty has only been delayed until later this year – not cancelled. It’s scheduled for October.
2. On 1st April 2010, fuel duty rates will automatically increase annually by 0.5p above inflation – which probably means another increase of at least 2p-3p per litre.
3. VED (Vehicle Excise Duty – Road Tax) will be going up for most van owners from 1st April 2009. Vans registered before 2001 with engines bigger than 1549cc will pay an additional £15 in road tax – taking the cost to £200. All vans registered after 2001 will also see an increase of £15 per year from 1st April, 2009.
4. Finally, the current rules on free fuel benefit for employer-provided vans will be modified so that they are in line with the rules for company cars. Along with this, the current ‘Fuel Benefit Charge’ multiplier for free car fuel benefit is being increased from £14,400 to £16,900. Note: This point was wrong. The only change is that the reimbursement of fuel costs to company van drivers will no longer be taxable (as is already the case with cars). The current £500 fuel benefit for company van drivers remains. My thanks to commenter David Heaton for pointing this out.

Finally, RTFO…

The Renewable Transport Fuel Obligation programme is a new initiative intended to use biofuels to reduce carbon emissions by the transport sector. The basic idea is that fuel suppliers will have to ensure that 5% of fuel sold on UK forecourts is biodiesel. This is the same setup that already exists in France, for example, where regular diesel includes 5% biodiesl as standard.

RTFO is replacing the current biofuel duty differential, where biofuels are subject to lower levels of duty than petroleum fuels. I don’t think it will have any real effect on regular fuel prices – although presumably it will mean 100% biofuels become more expensive.

A Green Budget?

You’ll notice that all of the measures above are very much designed so that they can be justified in terms of lowering carbon emissions. While everyone agrees that’s necessary, it does seem that businesses – which need to operate vans – are being left to pick up the eco-tab without any meaningful alternative being provided.