How the 2024 Autumn Budget Affects Motorists

The UK Autumn Budget 2024 has been released. If you’re a motorist there are some big changes on the horizon.

From a fuel duty freeze to updates in road tax and incentives for electric vehicles, here’s what the budget could mean for those of us behind the wheel.

Fuel Duty Stays Frozen (for Now)

In a welcome move, Chancellor Rachel Reeves announced that fuel duty will remain frozen until 2026. This means prices at the pump won’t be affected by increased fuel taxes for at least another year.

The 5p-per-litre cut, originally introduced to help ease the pressure on fuel prices, stays in place until March 2026.

This freeze translates to around £59 saved over the year for the average driver.

There’s also a Fuel Finder scheme on the way. By 2025, we’ll see live price updates at petrol stations across the country.

Helping motorists to spot the best fuel prices nearby.

Given the continued squeeze on household budgets, these moves should bring a bit of relief.

Tackling the Pothole Problem

Potholes are a real frustration for drivers. Especially given the damage they can cause to tyres. With that in mind, the Chancellor announced an additional £500 million for road maintenance. Allowing councils to target an estimated one million potholes each year.

This means that the Department for Transport now has a budget of £30 billion for 2025-26. A notable boost, though long-term solutions are still in high demand. In many ways fixing the pothole issues that plague the UK's roads is something which will require a steadier, multi-year funding commitment.

Road Tax Changes: What’s New with VED?

From April 2025, there will be a change in Vehicle Excise Duty (VED). Better known as road tax.

The government has restructured it in an attempt to move more people toward low-emission vehicles:

• Zero-emission vehicles road tax: if you’re planning on an electric vehicle (EV), the first-year VED rate stays ultra-low at £10
• Hybrid vehicles road tax: Hybrids are set to see an increase. With low-emission models (1-50 g/km CO2) rising to £110 and those emitting between 51-75 g/km paying £130
• ICE cars road tax: Petrol and diesel cars with emissions above 76 g/km will face a VED rate that doubles from its current level starting in 2025-26.

These changes mean traditional fuel cars could soon become much more costly to run. Leaving many drivers re-evaluating their future options.

Company Car Tax Changes for Electric and Hybrid Vehicles

For those with company cars, the budget introduces some adjustments to Benefit in Kind (BiK) tax rates:

• EVs: BiK rates will stay low to promote EVs, increasing gradually by 2% each year until capping at 9% in 2029-30
• Hybrids: Hybrid company cars will experience a sharper climb. They are set to increase to an 18% rate by 2028-29. Followed by 19% in 2029-30
• Petrol and Diesel Cars: Traditional cars will also see an increase. With a maximum rate reaching 39% by 2029-30.

This appear to be another attempt to make EVs a more attractive option. With hybrids and traditional vehicles gradually becoming pricier for businesses and employees.

EV Infrastructure and Funding

To try and make the EV switch more accessible, the government’s putting over £200 million into expanding the UK’s EV charging network.

There are plans to install new charge points across cities and major routes. This investment is a further attempt to address a core challenge in EV takeup - the lack of charging points nationally.

On top of this, there will be £120 million allocated for the plug-in vehicle grant. This will cover new electric vans and wheelchair-accessible vehicles.

Double-Cab Pick-Ups Reclassified as Cars

From April 2025, double-cab pick-ups will be reclassified as cars for tax purposes. Rather than commercial vehicles.

This change impacts capital allowances, BiK, and certain tax deductions.

Companies that bought or leased these vehicles before April 2025 will have some transitional arrangements - but moving forward, businesses can expect higher taxes on these popular vehicles.

The Road Ahead: 2030 and 2035

The government has doubled down on its target of phasing out new petrol and diesel vehicles by 2030. Hybrid sales are set to continue through to 2035.

As these deadlines near, road tax and company car tax will continue to evolve. As the government tries to encourage the uptake of EVs.

But there are some big questions left. As fuel duty income declines with the rise in EVs, what’s the plan to fill that gap?

The long-term impact on taxes, fuel prices, and EV incentives remains unclear. But for drivers in the market for a new car, the shift toward electric vehicles is looking less like a choice.

What Does the Budget Mean for Motorists?

The Autumn Budget 2024 brings some welcome news—like the fuel duty freeze and increased road maintenance.

But it also ramps up the cost of owning petrol and diesel vehicles and encourages businesses to make the switch to electric.

For those of us holding onto our traditional cars, it’s a clear signal to start planning for the EV switch. As the cost of running and owning an ICE vehicle looks set to carry on rising.

From the new tax structures to expanded EV support, this budget could be a turning point. It’s worth keeping an eye on these developments. Whether that means going electric now or setting our sights on EV deals in the coming years.