Spring Statement 2026: Drivers get a break as fuel duty cut continues
Car changing is a big deal
Chancellor Rachel Reeves has delivered the 2026 Spring Statement, confirming the 5p-per-litre fuel duty cut will continue, with no extra costs for drivers announced.
Chancellor of the Exchequer Rachel Reeves has given an update on her plans for the UK economy during her 2026 Spring Statement. While there are no additional costs announced for drivers, she highlighted the extension of the 5p-per-litre fuel duty.
The 5p-per-litre fuel duty – the tax included in petrol and diesel prices that funds public spending – has been extended until 31 August 2026. From September 2026, the duty will increase gradually: 1p in September, 2p in December, and another 2p in March 2027. Take advantage of the savings while they last before prices start rising.
Remember, you can buy a brand new or used car right here on Carwow. And you can sell your car, too. We’re here to help you through every step of your car-changing journey.
Other key motoring changes UK drivers need to know in 2026
Mandatory “Fuel Finder” scheme
Petrol stations must now report live price changes within 30 minutes to a central database. This new Fuel Finder scheme is designed to curb sudden price spikes, known as “rocket and feather” pricing, and is expected to save drivers between 1p and 6p per litre at the pump.
Standard road tax increase
Vehicle Excise Duty (VED) will rise in line with inflation (RPI) from 1 April 2026. If you have a car registered after April 2017, you’ll see the standard rate increase from £195 to £200 a year.
Luxury tax threshold for EVs
Looking to buy an EV? The threshold for the “Expensive Car Supplement” is increasing from £40,000 to £50,000. That means if your zero-emissions vehicle costs less than £50,000, you’ll skip the £425 annual luxury tax – helping mid-range EVs stay within reach.
Company Car Tax (BiK)
Benefit-in-Kind (BiK) rates for electric company cars will increase slightly, from 3% to 4%, starting 6 April 2026. Employers and employees should factor this into their tax planning for EV company cars.
Digital driving licences
A wider public trial of digital driving licences via the GOV.UK One Login app starts this month. You can use a digital licence for convenience, but it’s still a good idea to keep your physical card as a backup.
New theory test content
Learner drivers will see new questions on CPR and the use of defibrillators (AEDs) in the 2026 theory test. The aim is to improve emergency response knowledge for drivers and passengers alike.
London congestion charge
The daily congestion charge in London has now increased to £18. The previous 100% exemption for electric cars has ended; EV owners will now need to pay, though those registered for Auto Pay can receive a 25% discount, reducing the daily cost to £13.50.
Here are some key dates for you to note:
| Date | Change |
|---|---|
| 3 March 2026 | 2026 Spring Statement delivered by the Chancellor. |
| 1 April 2026 | VED (road tax) rates increase; new £50k luxury tax threshold for EVs begins. |
| 6 April 2026 | New tax year: Company car tax (BiK) rates for EVs rise to 4%. |
| 31 August 2026 | Current 5p fuel duty freeze is scheduled to end. |
| November 2026 | Euro 7 emissions standards become mandatory for all new cars and vans. |
Car change? Carwow!
Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.
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