Autumn budget 2024: fuel duty frozen, EV tax breaks and investment in charge points

The autumn budget was delivered in the houses of parliament today, and Chancellor Rachel Reeves has announced multiple new policies which will impact you.

Despite rumours of a fuel duty increase, it’s been frozen for another year. Reeves has also pledged £500 million to go towards fixing potholes, as well as a £200 million investment in public EV chargers.

Fuel duty frozen for another year

Despite strong rumours that fuel duty would rise by up to 7 pence-per-litre in the autumn budget, Rachel Reeves has today confirmed that it’ll remain frozen for a further 12 months. The 5 pence-per-litre discount has also been extended for a year.

Fuel duty has been frozen at 57.95 pence per litre since 2011, and the 5 pence-per litre discount has been in place since 2022 bringing it down to 52.95 pence. Reeves said in her statement that increasing the rate wouldn’t be the right thing to do for working people, despite the fact it could raise up to £3 billion per year.

It also represents a saving of £59 per year on average for drivers. Not enough to go mad, but every little helps.

Incentives for electric car buyers and increases in tax rates

The government was under growing pressure from the motor trade to do more to support the uptake of electric cars. The SMMT called for VAT rates on EVs to be cut in half, as well as drastically lower the tax rates on home charging. It also wanted EVs to be exempt from the £40,000 “luxury car” tax levy.

In her budget announcement, Reeves confirmed that EVs will retain their favourable Benefit in Kind tax rates for company car drivers. While they’re no longer exempt from vehicle excise duty from April 2025, electric cars will be subject to more favourable first-year tax rates than petrol and diesel powered cars.

Zero-emission vehicles will pay £10 for the first year, while cars emitting less than 50 g/km of CO2 will pay £110. This is up from £10 currently and it includes hybrids, which previously paid £0. All cars emitting 50-70g/km of CO2 now pay an extra £100 in the first year, taking it to £130. All cars emitting over 75g/gm of CO2 will see their first-year tax rates double.

£200 million investment in EV charging

Public charging is one of the biggest things putting people off buying an electric car, and Rachel Reeves has pledged a further £200 million for EV charging infrastructure.

This includes giving money to local authorities to install on-street chargers, which could be instrumental to increasing EV uptake amongst people who don’t have access to off-street parking.

No targets were set out in the budget stating how many new charging points would be installed, however the government is targeting 300,000 stations across the country by 2030. There are currently over 70,000.

£500 million to fix potholes

Good news for those of you who are sick of dodging potholes all the time, because the government has pledged an additional £500 million to repair our roads from next year.

This is £180 million more than initially thought, and is in keeping with Labour’s manifesto pledge to repair 1 million potholes a year. It was thought that £320 million would be invested, with the funds coming from the deferred A27 bypass scheme in West Sussex – a project About deemed to be of “poor value”.

Potholes have been a hot topic in previous budgets as well, with Conservative chancellor Jeremy Hunt pledging £200 million to this cause in the 2023 spring budget.

Autumn budget 2024 verdict

Commenting on the 2024 Budget, Iain Reid, head of editorial at Carwow said:

“There were a couple of surprises that we’re glad to hear in the Chancellor’s Budget. The freeze on fuel duty was unexpected and is of course good news for drivers. Given that for so many of us the car is an essential part of our lives, any increase in fuel prices would have been unwelcome.

“The Chancellor said she wants to incentivise the take up of electric cars. She confirmed that EVs will retain their favourable Benefit in Kind tax rates for company car drivers. And while they’re no longer exempt from vehicle excise duty from April 2025, electric cars will be subject to more favourable first-year tax rates than petrol and diesel powered cars.

“However rather than incentivising electric car ownership, it looks like she is disincentivising ownership of other types with big increases in VED rates and a big increase in Benefit in Kind for hybrid cars coming in 2028.

“The Government is introducing a requirement for all UK retail petrol-filling stations to report prices and the unavailability of fuel within 30 minutes of a change. This should make it easier for consumers to find in real time the cheapest fuel in their area but it’s just a shame that it looks like it will take a year to put into place.

“While an extra £500million to help deal with potholes is welcome, it’s not going to fix the problem overnight though!”

It was a mixed response from the Society for Motor Manufacturers and Traders (SMMT), with chief executive Mike Hawes welcoming the tax benefits on electric cars, but he says that more needs to be done to incentivise people to buy EVs.

In a statement he said: “A strong manufacturing sector depends on a strong market. The lack of substantive measures to support the new car market – in particular for electrified vehicles – is hugely disappointing.

“We welcome the extension of the Plug-in Van Grant and company car tax benefits, but these alone cannot drive the growth in demand needed. With the sector challenged to deliver the world’s most ambitious EV transition targets, achievement of those targets is in serious doubt.

“There must be an urgent review of the market and regulation, else the cost will soon be felt in reduced UK investment, economic growth and jobs.”

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