Motor Vehicles: VAT
The question
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential impact of maintaining annual increases in Vehicle Excise Duty for private cars while reducing rates for heavy goods vehicles on drivers.
Answered by Dan Tomlinson
As announced on 20 May 2026, the Government is providing temporary support to the heavy goods vehicle (HGV) sector to reflect its disproportionate exposure to diesel costs and its importance to supply chains across the economy. The 12-month vehicle excise duty holiday for HGVs will help prevent fuel price increases from the Iran war spreading through the economy.
Car drivers will benefit from the recent announcement to freeze fuel duty until the end of 2026, as will employees using their own car for work and the self-employed who use the simplified expenses rates, who will be able to benefit from 55p per mile tax free.
The Government regularly reviews the rates and thresholds of taxes and reliefs at fiscal events to ensure that they are appropriate and reflect the current state of the economy.
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