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'Elephant in the room’: Fuel duty and car tax changes expected in Rishi Sunak's Budget


As Rishi Sunak prepares to release the details of the Budget, many industry insiders will be watching with bated breath to see the announcements affecting drivers. The review, which will be held on October 27, could clear up a number of things, from electric vehicle infrastructure to changes to fuel duty and company car tax.

November’s COP26 summit will be firmly on the chancellor’s mind as the UK looks to position itself as a global leader in the fight against climate change.

This could signal a broader investment into zero emission vehicles, with a big push for pure electric and plug-in hybrid cars.

In May 2021, the Government’s energy regulator, Ofgem, announced a massive £300million boost to the EV network.

Around £150million of which will be used to develop EV infrastructure, including rapid charging points.

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“Fuel duty income continues to be the elephant in the room, as the country waits with bated breath to hear how the Government plans to plug the £28billion gap it faces.

“We’re unlikely to see a clear plan this year, but we could see some early indicators.

“One of the key things drivers and businesses should keep a keen ear out for is any changes to the current fuel duty freeze – or indeed an omission of this in the Chancellor’s statement.

“It’s worth noting that without any reference to an extension from the Chancellor the freeze will automatically end.

“That’s because existing legislation around fuel duty stipulates how much it goes up by each year.”

Further changes are also expected within regards to the taxation of cars, especially company cars.

Currently, drivers pay tax on the value of the company car, which depends on how much it would cost to buy and the type of fuel it uses.

Mr Walters continued, saying: “We’d also welcome further transparency into Company Car Tax rates beyond April 5, 2025.

“The Office of Zero Emission Vehicles (OZEV) has responded positively to widespread calls for this from industry leaders, but whether or not we’ll hear more on this from the Chancellor this side of Christmas remains to be seen.

“Many aspects of this year’s autumn budget are hugely uncertain – possibly more so than ever before, at least in my lifetime. 

“There’s a lot to be optimistic about: the country is taking the climate crisis seriously and we can expect environmental policy and decarbonisation to be a central theme in the Chancellor’s speech.

“But at the same time, warnings of an impending energy crisis and cuts to universal credit have raised the political temperature considerably.”

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