• Fuel duty will continue to be frozen, and there are no plans to re-introduce the escalator mechanism. 
  • Fuel duty incentives for cleaner fuels – The fuel duty differential between the main rate of fuel duty and the rate for road fuel gases such as compressed natural gas, liquid natural gas and biomethane will be maintained at current levels until March 2024. The differential between the main rate and the liquefied petroleum gas rate will continue to reduce by 1ppl each year to 2024. The government will review the impact of these incentives on vehicle uptake
    and the public finances at Budget 2018. The government will also seek EU approval to apply a
    reduced rate of fuel duty to methanol.
  • Fuel price comparison road signs will be trialled on motorways to help consumers find the cheapest fuel.
  • No change to VED rates, but paper tax discs will no longer be issued from 1st October 2014. The system will be all electronic. Motorists will be able to pay their VED by direct debit annually, biannually or monthly, should they wish to do so, though a 5% surcharge will apply to biannual and monthly payments.
  • Whiplash cheats, whose fraudulent compensation claims have driven up average motor insurance premiums, will be scrutinised by new independent medical panels. This will ensure that only evidence from accredited professionals can be considered.
  • The statutory maximum price of the MOT test for a car will be frozen at £54.85 until 2015. 

In terms of investment the government plans to spend £5 million during 2014-15 in a large scale electric vehicle-readiness
programme for public sector fleets. The programme aims to promote the adoption of ultra low emission vehicles (ULEVs) by demonstrating clear leadership in the public sector. 

Also as part of the National Infrastructure Plan, the government will create a £10 million prize for the development of an urban area as a testing ground for driverless cars.

There are no immediate significant changes to company car tax but the following anti-avoidance measures are to be applied to protect tax revenues from 6 April 2014:

  1. Ensure individuals make payments for private use of a company car or van in the relevant tax year (Finance Bill 2014)
  2. Ensure that where an employer leases a car to an employee, the benefit is taxed as a car benefit rather than as employment earnings (Finance Bill 2014)

The legislation is likely to increase the workload of payroll departments where companies have been indulging in less-than-straightforward company car schemes.

In line with the previous budget statement the  fuel benefit and van benefit multipliers will increase by around 3% in 2014/15. Car fuel BIK rises to £21,700 whilst the van multiplier rises to £3,090 and van fuel benefit increases to £581.