Following George Osborne’s Budget 2016, motorists and commercial transportation companies will be pleased to hear that fuel duty has been frozen for yet another year.
However, the government hopes to raise additional revenue from UK motorists in the form of a rise in Insurance Premium Tax, which the Chancellor increased to 10%.
Insurance Premium Tax was last increased from six per cent to 9.5% in November 2015. At the time, the Association of British Insurers (ABI) said the rise added close to £13 to the average fully comprehensive motor insurance policy.
This latest increase will also affect insurance policies for healthcare, property and pets. The Chancellor said that the half per cent increase would generate revenue for flood defences up and down the country.
In the wider economy, growth was forecast to be two per cent. This figure has been revised down from 2.4 per cent predicted in the Autumn Statement last November.
Osborne said the outlook for the wider global economy was “materially weaker” and that the UK was “not immune” to a slowdown in other markets around the world. Nevertheless, the UK economy was still predicted to grow faster than any other major Western economy.
The Chancellor also predicted that a million new jobs will be created by 2020, while inflation was forecast to hit 0.7% in 2016, rising to around 1.6% by 2017.
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