Green Taxes And The Environment

Car Fuel Benefit

Since its introduction in 2003, the ‘fuel benefit multiplier’ has remained at £14,400. The multiplier is the amount by which the car’s emissions based benefit rate is multiplied to arrive at the amount liable to tax and (employer) national insurance contributions.

From 6 April 2008 the multiplier will be increased to £16,900, taking the maximum income tax payable when an employer pays for the fuel an employee or director uses for private travel, from £168 to just over £197 per month.

Air Passenger Duty

Two intended measures have been announced which affect Air Passenger Duty (APD):

• From 1 November 2008 duty will be payable at the standard rate on all ‘business class only’ flights (thus rising from £40 to £80 for non-EEA flights).
• From 1 November 2009 duty will be payable per flight, not per passenger, under a new aviation tax.

APD rates will remain frozen at their current rates for 2008/09. For EEA flights these are £20 (standard) and £10 (reduced). For non-EEA flights these are £80 (standard) and £40 (reduced).

Other Green Measures

Other environmental measures announced included:

• Confirmation of a rise in line with inflation for the climate change levy from April 2008, with agreements extended to 2017.
• Exemption for investment in microgeneration from reassessment between rates valuations.
• A draft Order on the measures to support biofuels from April 2008 has been laid in Parliament.

The Government also hopes to be able to include policy recommendations based on the King Review of low-carbon cars in Budget 2008.