George Osborne

Spending review 2015: diesel company car drivers will continue to be penalised

George Osborne

Chancellor George Osborne has announced that drivers of diesel company cars will continue to pay an extra 3% in tax following “the slower than expected introduction of more rigorous EU emissions testing”.

Osborne said the Government would continue to support the development of ultra-low emission vehicles, but the planned axe of a 3% diesel car supplement for company car drivers would be delayed until 2021.

RAC urges George Osborne to cut costs for motorists

Previously, plans were in place to drop the supplement – meaning drivers of diesel company cars would pay the same benefit-in-kind (BIK) tax as those with petrol cars emitting the same CO2.

Last night, the Society of Motor Manufacturers and Traders (SMMT) president Gareth Jones urged the Government not to penalise the industry following the Volkswagen emissions scandal.

He said: “Create the conditions that allow us to develop the quality products for which we are world-renowned. Back us to create the jobs, economic growth and prosperity that Britain needs. We have shown we can deliver; work with us to make sure that success continues.”

The Chancellor today announced he’d be spending more than £5 billion on roads maintenance and was creating a £250 million pothole fund. A further £250 million would be invested in Kent’s motorway infrastructure in a bid to relieve some of the congestion caused by Operation Stack.

Osborne also confirmed he would bring forward reforms to the compensation culture around minor motor accident injuries.

He said: “This will remove over £1bn from the cost of providing motor insurance. We expect the industry to pass on this saving, so motorists see an average saving of £40-50 per year off their insurance bills.”

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