Hey, car owners! The new Chancellor of the Exchequer, Rachel Reeves, just dropped her 2024 Autumn Budget, and there are some major updates motorists need to know about. Here’s a round-up on what’s changing for motorists and what it means for you starting in 2025.
Fuel Duty Freeze
In a surprising twist, Reeves announced that fuel duty won’t increase for at least another year. Plus, the current 5p cut in duty—introduced by the last Conservative government in 2022—will stick around. Many thought there would be a hike to boost Treasury funds, but instead, it’ll stay at 52.95p per litre.
Reeves explained, “I have concluded that in these difficult circumstances while the cost of living remains high and with a backdrop of global uncertainty increasing fuel duty next year would be the wrong choice for working people.”
Simon Williams from the RAC said drivers will be breathing a sigh of relief with this news, emphasising how essential cars are for everyday life. With 56% of the petrol price already going to taxes, this freeze is definitely a win for drivers.
Road Tax (VED) Updates
Starting April 1, 2025, there will be some big changes to Vehicle Excise Duty (VED) for new cars. If you’re thinking about a hybrid or ICE car, pay attention! The first-year tax for cars emitting between 1-50g/km of CO2 (including most hybrids) is skyrocketing from just £10 (or free for hybrids) to £110. For cars in the 51-75g/km range, rates are jumping from £30 (or £20 for hybrids) to £135. This means if you drive a new VW Golf 1.5 TSI, you’ll be paying an extra £220 in the first year. If you’ve got a BMW X5 M60i, prepare for a whopping £2,745 hit.
Beyond the first year, standard VED rates will go up with inflation, and the government is considering raising the threshold for the extra charge on expensive cars (those costing over £40,000) at a future budget announcement. For now, company car tax rates will stay at 2% until 2026, which is good news if you're driving a company vehicle.
Investment in Infrastructure and EV Chargers
The Chancellor also announced a £500 million boost for road maintenance starting April 2025, which should help tackle those annoying potholes.
There’s also £200 million earmarked for expanding EV charger networks across England. However, no new incentives for private buyers to go electric were mentioned, which the Society of Motor Manufacturers and Traders had hoped for.
Plus, there’s £2 billion aimed at supporting the UK’s electric vehicle industry and boosting manufacturing, though the details are still a bit hazy.
Fuel Price Monitoring
Exciting news: a new 'Pump Watch' scheme is set to launch by the end of 2025, aimed at monitoring fuel prices and ensuring you get the best deal at the pump. This move has been on the radar for a while, and it’s about time!
What do you think of the Autumn Budget 2024? Are there any changes you want to see in the 2025 budget? Drop your thoughts in the comments below!
