Briefing

Green shoots in the Autumn Budget

November 1, 2024

The Autumn Budget included changes to Vehicle Excise Duty and extended benefit-in-kind rates

Doubled the rate of first year VED for higher polluting cars

16th in the ranking for the first year VED of a BMW X5

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The Autumn Budget revealed some promising green moves on tax policy as relating to road transport. Vehicle Excise Duty will be reformed to widen the "tax gap" between battery-electric vehicles and fossil fuel cars, making EVs a more attrractive prospect for buyers.

But the changes don't go far enough. This is a positive signal from government but to truly address the damage bigger, more-polluting vehicles cause, the government is going to have to get much bolder with its tax policy.

Benefit-in-kind schemes saw the beneficial rates for battery-electric vehicles extended and say an uplift for plug-in hybrids, meaning that some of the real-world emissions that PHEVs produce will be addressed slightly more. The government could make real progress however, by ensuring that first year VED more accurately reflects the damage PHEVs are doing to the climate as well.

SUVs are still a big (and getting bigger) problem in the UK. We need to see a first year VED rises targeted at the heaviest 10% of new non-zero emission cars and the heaviest 5% of new BEVs.

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