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Budget March 2010 - motoring and travel

  • Published: Friday, 25 June 2010

The Fuel Duty increase for 2010 will be staged, starting with a one penny increase per litre on 1 April. There will be new investment to improve UK motorways and to repair damage caused to roads by the recent bad weather.

Budget 22 June 2010

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Find out what the Budget does and what takes place on the day

The March 2010 Budget was the final Budget for the last Labour government. George Osborne, Chancellor of the new coalition government, delivered his first Budget on Tuesday 22 June 2010. The new Budget may affect some of the information below. To read about the June Budget, click the orange button.

Road improvements

Budget March 2010 announces:

  • £100 million for the repair of local and regional roads damaged by the recent bad weather 
  • £285 million for improvements in the motorway network, including expanding capacity by allowing motorists to use the hard shoulder at busy times

Fuel Duty

The previously announced Fuel Duty increase for 2010 will be staged. There will be an increase of:

  • one penny per litre on 1 April 2010
  • one penny per litre on 1 October 2010
  • 0.76 pence per litre on 1 January 2011

The table below shows how this will affect fuels costs.

Fuel type Current rate (per litre unless stated)  New rate from 1 April 2010 (per litre unless stated) New rate from 1 October 2010 (per litre unless stated)  New rate from 1 January 2011 (per litre unless stated)
Ultra-low sulphur petrol / diesel   56.19p  57.19p 58.19p 58.95p
Sulphur-free petrol / diesel 56.19p 57.19p 58.19p 58.95p
Biodiesel  36.19p 57.19p 58.19p 58.95p
Bioethanol   36.19p 57.19p 58.19p 58.95p
Liquid petroleum gas used as road fuel   27.67p per kg 30.53p per kg 31.95p per kg 33.04p per kg
Natural gas used as road fuel  22.16p per kg  23.60p per kg 25.05p per kg 26.15p per kg
Rebated gas oil (red diesel, eg gas oil or kerosene)  10.80p 
10.99p 11.18p 11.13p
Fuel oil  10.37p  10.55p 10.74p 10.88p

Fuel Duty will also rise by one penny per litre in real terms on 1 April each year from 2011 to 2014.

Vehicle Excise Duty (VED)

From 1 April 2010, the government will introduce new first-year rates of vehicle excise duty (VED), as announced at Budget 2008. First-year rates will encourage the purchase of more fuel-efficient cars by providing a strong signal to the consumer at the point of purchase.

Company Car Tax (CCT)

Company Car Tax will be halved for ultra-low carbon cars for five years from April 2010.

Air travel

Air Passenger Duty will rise from November 2010, as announced in Budget 2009.

Air Passenger Duty (APD) is the departure tax on flights from UK airports. There are four bands of APD, depending on how far you fly from London.

The table below shows Air Passenger Duty for each passenger from November 2010.

Bands for countries based on distance in miles from London  APD for economy cabins  APD for premium cabins
Band A (0 - 2000 miles, eg Europe, Morocco and Tunisia)    £12  £24
Band B (2001 - 4000 miles, eg Canada, Egypt, United States)  £60 £120
Band C (4001 - 6000 miles, eg Caribbean, India, South Africa)  £75  £150
Band D (more than 6000 miles, eg Argentina, Australia, Singapore)  £85  £170

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