Motoring

Autumn budget 2023: What it means for drivers

Country road

Chancellor of the Exchequer, Jeremy Hunt delivered his Autumn Statement for 2023 this week and while there’s not much for motorists, road tax is on the rise.

Fuel Duty

As with the Budget 2023 back in March, the so-called 5p per litre temporary cut in fuel duty remains. It was first announced in March 2022 and the lack of action in the Autumn Statement means it stays in place until March 2024.

Hunt said the measure saves the average driver around £100 over 12 months and has saved more than £200 since it was introduced in March 2022.

Road tax

In April 2023, vehicle excise duty (VED) increased in line with inflation, and this will happen again from 1 April 2024.

It means the flat rate paid from year two, as well as the first-year rate, will increase, though zero-emission vehicles will continue to be exempt.

However, VED for HGVs, as well as the HGV levy, “will both remain at 2023-24 rates for 2024-25”.

From 2025, electric vehicles will no longer be exempt from car tax – and it includes electric vans.

Hunt said it will “ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate”.

Currently, electric cars are exempt from both the annual £165 standard rate VED and the £335 premium supplement for new cars with a list price of £40,000 or more.

Under the new rules new zero emission cars registered on or after 1 April 2025 will be liable to pay the lowest first year rate of VED (which applies to vehicles with CO2 emissions of 1g/km to 50g/km) currently £10 a year.

From the second year of registration onwards, they will move to the standard £165 rate.

The government also intends to tax older electric vehicles, with those first registered between 1 April 2017 and 31 March 2025 set to pay the standard rate.

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