What does the Autumn budget 2021 mean for UK drivers?

October 27, 2021 by

The UK Autumn budget sees a planned increase in fuel duty cancelled following recent petrol and diesel supply shortages and record prices. Read on to see how the 2021 Autumn budget will affect you.

UK chancellor Rishi Sunak has revealed the government’s 2021 Autumn budget. As well as revised tax rates across the hospitality, leisure and retail sectors, it confirms that fuel duty will remain at the same rate as in recent years.

Fuel duty was expected to rise by 2.8p per litre in today’s budget – up from the current 57.95 pence-per-litre rate.

Reportedly, the planned increase was scrapped in light of the recent UK fuel supply shortage that saw average petrol prices soar to a record average of 142.94 pence per litre.

The prickly issue of fuel duty and Vehicle Excise Duty (road tax) is likely to become a hot topic in the coming years as more and more drivers make the switch to electric cars.

The Tesla Model 3 topped the UK’s new-car registrations charts in September 2021

These vehicles don’t require petrol or diesel to run, meaning EV drivers are insulated from any increases in fuel duty.

Already, the government is expecting to receive around £20.9 billion from fuel duty in the 2020-2021 financial year – significantly less than the £27 billion it raked in during the 2019-2020 financial year. Although, reduced use of personal vehicles as a result of Coronavirus lockdown restrictions will also have played a part in this shortfall.

Additionally, the increasing popularity of electric cars and zero-emissions vehicles (which are currently exempt from road tax) means the government may have to investigate alternative means of taxing drivers.

Watch this electric car range test video

The recently introduced London Ultra-Low Emissions Zone charge (which requires drivers of older, more polluting cars to pay a charge to drive within London’s North- and South-Circular roads) is one model that may be rolled out to other UK cities.

There have been suggestions that pay-by-mile schemes could be introduced as part of future budgets, but it appears the government is committed to encouraging drivers to switch to electric vehicles.

It’s also pledged to invest a further £620 million in the Plug-in Car Grant (PiCG) over the coming years.

If you’re in the market for a new EV, check out the best electric cars on sale now or compare the latest new car deals available through carwow.