UK Autumn Statement 2023 - A Boost For Motorists?

The UK Chancellor of the Exchequer, Jeremy Hunt, announced the Autumn Statement of 2023, outlining intent for all areas regarding the Conservative manifesto.

One area that was briefly covered was the automotive industry, with plans for both investment and continuity of plans regarding all-things cars.

Drivers in the UK may be wondering what these policies entail, and how it may impact motoring across the country. Today, we will go over the plans set out by the UK government that affect driving in the UK.

EV Incentives

It is no secret that the UK government have been pushing for net zero emission levels by 2050, with electric vehicle investment being at the forefront of this push. This includes the plan for all cars sold brand-new to be zero emission by 2035.

The Autumn Statement set out by Jeremy Hunt laid out an acceleration of incentivising non-EV buyers to switch over to electric/hybrid vehicles, with a planned £2bn investment into the EV automotive industry.

This investment involves a priority to implement more EV charging points country-wide, with government officials declaring that they will: “look to remove unnecessary planning constraints by accelerating the expansion of EV charging infrastructure.” These manufacturing plans for electric vehicle infrastructure will be applied to grow the EV sector, improving UK energy efficiency and welcoming high-income jobs within the UK.

Many EV enthusiasts have been calling for a drop in VAT, or even axing VAT rates for electric vehicles in recent years. However, VAT rates for electric vehicles have not been altered, which remains at 20% upon purchasing or leasing an electric car. It looks like for the near future at least, VAT rates will remain the same for EV buyers.

Fuel Duty

Fuel duty seems to still remain frozen for the 13^th year in a row, as the Chancellor of the Exchequer did not mention any changes in fuel duty rates.

The current fuel duty rate in the UK is 52.95 pence per litre (ppl), paired with a temporary 5ppl cut which was introduced in 2022. The good news from the recent Autumn Statement is that the 5ppl cut is set to remain until March 2024.

The lack of mention of fuel duty rates indicates the plans from the 2023 Spring Budget for fuel duty will remain for the meantime.

Road Tax Increase

Naturally, taxes will usually increase with inflation – this will be applying to road tax as per the UK Autumn Statement.

As of April 1^st, 2024, Vehicle Excise Duty (VED) and Heavy Goods Vehicle (HGV) tax rates will increase in line with inflation. It is important to note that EVs will be losing their VED exemption in 2025 which was announced in the 2023 Spring Budget.

With inflation as a massive factor in road tax increases, vast majority of motorists will be paying more road tax in 2024.

Summary of UK Autumn Statement

Whilst the 2023 Autumn Statement lacked a vast amount of motoring changes, it significantly highlights the investment that the UK government is putting into the electric vehicle market. Even with the vast amount of investment in EVs, the latest Office for Budget Responsibility (OBR) forecast showed that 38% of new vehicles sold in the UK in 2027 are forecasted to be electric, down from the 67% it predicted in March – this forecast was released alongside the Chancellor’s recent Autumn Statement. It will take a matter of time before we know if the Autumn Statement will help or hinder UK motorists, particularly those who are EV buyers, or are considering switching to electric early.