Spring budget 2023: reformed HGV levy from August, fuel duty and HGV road tax remain frozen

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The 2023 Spring Budget has seen the introduction of a new reformed HGV levy active from August 2023, while fuel duty is to remain frozen for another 12 months.

Spring budget 2023: reformed HGV levy from August, fuel duty and HGV road tax remain frozen
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The heavy goods vehicle (HGV) levy has been suspended until 31 July 2023, however a reformed HGV levy will come into effect on 1 August 2023 with a revised structure and rates.

The reforms to the HGV levy are a further step towards reflecting the environmental performance of the vehicle, the government states.

For foreign-registered vehicles, the reforms also ensure that the levy is focused on road usage and that it is more clearly aligned with the government’s international obligations.

For UK registered vehicles, both the HGV levy suspension and resumption in August will be applied automatically by DVLA.

Fuel duty remains frozen

The fuel duty rate, which has been frozen for 13 consecutive years, will remain frozen for another 12 months.

Last year’s temporary 5p cut will be maintained and duty will not be increased with inflation.

“This will maintain the cut in the rates for heavy oil (diesel and kerosene), unleaded petrol, and light oil by 5 pence per litre (ppl), and the proportionate percentage cut (equivalent to 5ppl from the main Fuel Duty rate of 57.95ppl) in other lower rates and the rates for rebated fuels, where practical,” the government’s overview of the Spring Budget explains.

The changes will take effect from 23 March 2023.

Vehicle Excise Duty (VED) for HGVs also remains frozen

While the Chancellor of the Exchequer has announced the increase of VED (commonly known as road tax) rates for cars, vans and motorcycles in line with RPI with effect from 1 April 2023. The government won’t increase the rate for HGVs so as “to support the haulage sector”.

The Vehicle Excise Duty (VED) for HGVs remains frozen for 2023-24.

RHA unhappy with increasing corporation tax and HGV levy reform

While the Road Haulage Association (RHA) is pleased to see the fuel duty and VED for HGVs frozen, RHA Director of Public Affairs & Policy, Declan Pang, expressed the organisation’s disappointment in seeing the increase in corporation tax from 1 April as well as the return of the HGV levy from August this year.

“This is a tax targeted at the road freight industry that economic growth in the UK relies upon,” Pand said.

“We are also concerned that the focus of the HGV levy has been shifted towards CO2 emissions. The original intention of the levy was to ensure overseas operators contributed to the upkeep of the UK road infrastructure. If this is no longer the main purpose of the levy, we question its utility at all, given the progress the industry has already made in reducing emissions. The lowering amounts of levy funds recouped as fleets modernise will also need to be addressed,” he added.

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