The new Chancellor of the Exchequer, Rachel Reeves, has outlined her 2024 Autumn Budget, bringing some key updates for motorists. From road tax changes to fuel duty freezes, here’s what UK drivers need to know and how these changes may affect you in the coming years.
Fuel Duty: No Increase for Another Year
In a move that many drivers will welcome, the government has confirmed that fuel duty will not increase for at least another year. The existing 5p cut in fuel duty, introduced in 2022, will remain in place, preventing a potential 7p-per-litre increase from 1 April 2025.
Chancellor Reeves acknowledged that raising fuel duty would put additional pressure on households, stating, “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.”
This freeze means fuel duty will stay at 52.95p per litre, offering some relief to motorists at a time when household budgets are already stretched.
Road Tax (VED): Big Changes from April 2025
Vehicle Excise Duty (VED), commonly known as road tax, will see some significant adjustments from April 2025. The government is aiming to encourage drivers to switch to electric and low-emission vehicles by increasing the tax on petrol and diesel cars while keeping zero-emission vehicle costs lower.
Here’s what’s changing:
- First-Year VED Rates:
- Plug-in hybrid vehicles (emitting 1-50g/km CO2) will see a tenfold increase in first-year road tax, rising from £10 to £110.
- Vehicles emitting 51-75g/km CO2 will see their first-year tax increase from £30 to £135.
- All other rates will double, meaning owners of petrol and diesel cars will pay considerably more in their first year.
- For example, a new VW Golf 1.5 TSI will cost £220 more in first-year road tax, while a high-emission vehicle like a BMW X5 M60i will see an increase of £2,745.
- Standard Annual VED Rates:
- These will continue to rise in line with the Retail Price Index (RPI), as per usual practice.
- The government is also reviewing whether to increase the Expensive Car Supplement (currently affecting vehicles over £40,000, including EVs) at a later date.
- Company Cars & Pickups:
- Benefit-in-kind (BiK) tax rates for company cars will remain at 2% until 2026.
- Double-cab pick-ups will be reclassified as cars for tax purposes from April 2025, affecting capital allowances and business tax deductions.
More Funding for Road Repairs & EV Infrastructure
To tackle the UK’s ongoing road maintenance issues, an extra £500 million will be allocated for pothole repairs from April 2025. According to government estimates, this will help fix around one million potholes annually.
While this is a positive step, councils must use the funding for long-term road resurfacing rather than just patching up holes. Preventative maintenance, such as surface dressing, is a proven way to extend road life and reduce the need for costly repairs.
In addition, £200 million will be invested in expanding the UK’s electric vehicle charging network, helping to improve accessibility for EV drivers. However, there are no new incentives for private buyers to switch to electric vehicles, something the car industry has been pushing for.
Pump Watch: Transparent Fuel Pricing
One of the biggest announcements is the introduction of a mandatory Pump Watch scheme by the end of 2025. This initiative will require fuel retailers to publish real-time prices, ensuring drivers can find the cheapest fuel near them and that wholesale price reductions are passed on to consumers.
This is a long-overdue move, as fuel price transparency has been a major issue in the UK. Many motorists have been frustrated by slow price reductions at the pump, even when wholesale fuel costs drop.
What Does This Mean for You?
For most drivers, the main takeaway from the 2024 Autumn Budget is that motoring costs will continue to rise, particularly for those with petrol, diesel, or hybrid vehicles. While the fuel duty freeze offers short-term relief, the increases in road tax mean that buying a new car—especially a non-electric one—will become more expensive from 2025.
At 247 Auto Locksmith, we understand the challenges drivers face when it comes to vehicle ownership and maintenance costs. If you need expert advice on key replacements, security solutions, or car lock issues, we’re here to help.
What are your thoughts on the Autumn Budget? Do you think these changes are fair? Let us know in the comments below!