Pre-Budget predictions for Britain’s motorists

Chancellor Alastair Darling is set to give struggling motorists a welcome break this afternoon with a series of tax cuts and postponements in his Pre-Budget report.

The most important move anticipated will be the postponement of the controversial VED change whereby cars built after 2001 are subject to an annual bill of £415.

Under current rules only post-2006 cars in band G are subject to a £400 tax bill, but when the increase to £415 was announced cars built after 2001 were included in the hike.

This means motorists owning family cars such as a 2.5-litre Ford Mondeo would be subjected to an increase from £180 to £415.

View our budget-beating slide show – the cheapest cars to tax

However, today’s announcement is expected to postpone this change until 2010.

Thanks to oil prices slumping to less than $50 a barrel, motorists have been getting some welcome relief at the pumps with a litre of petrol now costing less than 90p at a host of supermarkets.

There could be more good news at filling stations with Mr Darling expected to halt a 2p-a-litre rise in fuel duty.

New cars 'cheap as chips'

The most significant overall announcement in the Pre-Budget is the shock cut in VAT from 17.5% to 15% - the lowest rate since the 1970s.

This reduction is to encourage more consumer spending and kick-start Britain’s nose-diving economy – and with VAT charged on most new products it means more good news at the fuel pump and new car sales.

Alastair Darling will be announcing the details of his Pre-Budget from 3.30pm this afternoon.

We’ll be reporting live on the budget and encouraging your views on any developments so don’t forget to come back to find out how it affects you.