The Government has supplied an replace on an upcoming change to a tax on motorists. There were main modifications to taxes on drivers announced in the Autumn Budget, including a new pay-per-mile tax for EVs and plug-in hybrids, which will come in from April 2028.
Ministers also prolonged the momentary 5p per litre cut in fuel responsibility, with the present charge frozen until September 2026. This means there will be on increase in line with inflation for the 2026/2027 tax 12 months.
The cut will progressively be reversed, returning to March 2022 ranges by March 2027. This will occur with a 1p increase in September 2026, a 2p increase in December 2026 and then another 2p increase in March 2027.
From April 2027, fuel responsibility will rise yearly in line with inflation. Liberal Democrat MP David Chadwick requested the Government what influence the Government had made of the increase in fuel responsibility “on household living standards”.
Treasury minister Dan Tomlinson issued a response. He said: “At Budget 2025, the Government announced continued support for people and businesses by extending the temporary 5p fuel duty cut until the end of August 2026. Rates will then gradually return to early 2022 levels.
“The deliberate increase in line with inflation for 2026-27 will not take place, with the Government uprating fuel responsibility charges by RPI from April 2027. This will save the average car driver £49 next 12 months in contrast to earlier plans.”
He said the Government had set out the estimated impact from its tax changes on household incomes. He shared a link to a document with more information.
The new vehicle pay-per-mile tax for EVs and plug-in hybrids will operate alongside their existing Vehicle Excise Duty. A Government document published as part of the Budget outlined: “While it is honest for EV drivers to contribute for their car utilization in the same manner as those driving petrol and diesel vehicles, the Government is dedicated to making certain that driving an EV stays an enticing alternative for customers.
“Therefore, the tax paid by EV drivers will be around half the fuel duty rate paid by the average petrol/diesel driver, with a reduced rate for plug-in hybrid drivers. When eVED takes effect in April 2028, an average EV driver will pay around £240 per year or £20 per month.
“Other vehicle sorts, such as vans, buses, bikes, coaches and HGVs, will be out of scope of eVED when it is launched, with the transition to electric energy for these vehicle sorts being presently less superior than for vehicles.”
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