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ALL UK drivers risk a £59 charge ON TOP of new pay-per-mile car tax from the Labour Party government, it has been warned. Chancellor Rachel Reeves could scrap the fuel duty freeze in the Autumn Budget on November 26. The five pence per litre cut provides savings of around £59 for the average car driver in 2025-2026. Modelling from the RHA found that a 5p fuel duty increase would remove almost £2billion from UK household budgets every year. Richard Smith, MD of the RHA, said: "These new polling results confirm what we've been hearing as we travel the country. People understand that when transport costs rise, the prices of everyday essentials are hit hardest, with lower-income households feeling the impact most acutely. READ MORE Drivers warned car tax perk will be scrapped for 'first time' ever in UK "This week is National Lorry Week and we're reminding everyone that with over 80 per cent of goods in this country moving by road freight, our industry keeps shelves stocked with essentials." Mr Smith concluded: "Many business and household budgets are stretched to breaking point, and it's clear many share our concerns. We repeat our call on the Chancellor to keep the freeze on fuel duty". It comes amid the risk of a new 3p pay-per-mile car tax for motorists. Paul Barker, editor at Auto Express says the move highlights was inevitable given the challenge of replacing lost fuel duty revenue. But he warned that any new EV tax must be carefully balanced to avoid discouraging drivers from making the switch to electric. He said: “With the switch to electric taking ever-increasing chunks out of fuel duty revenues, at some point a government was going to have to decide what comes next. Petrol cars will be on the road for many, many years to come, but every electric car sold is one fewer that's visiting petrol stations and pumping money into Treasury coffers. "Adding a 'new' tax to electric cars months after the announcement of the Electric Car Grant and with manufacturers labouring under Government targets for EV sales is likely to prove controversial but the rumoured 3p per mile rate for EVs would still be significantly less than ICE car drivers are paying in duty on fuel. "We would like to to see VAT removed from public EV charging to help counterbalance the pay per mile charge and make EVs more accessible to those without a driveway or facilities to charge at home. "Pay per mile car taxation has a number of hefty issues to negotiate – including the tech, fairness of implementation and privacy – so it will be very interesting to see the mechanics of the Government's implementation. In the long term, however, it’s the direction of travel for all cars, not just EVs.”
