The measure, announced by the Treasury on 20 May, comes alongside an extension of the existing 5p-per-litre fuel duty cut until the end of the year. According to the government, the HGV road tax holiday will save £600 for a typical heavy lorry and £912 for the largest vehicles on UK roads.
The Treasury said the package was being introduced in response to higher fuel costs linked to the war in Iran. It added that the fuel duty cut would keep petrol and diesel duty at its lowest level for more than 16 years.
The most direct measure for road transport operators is the temporary reduction in HGV road tax at renewal: under the scheme, hauliers will pay £1 when renewing during the 12-month holiday. The government says this will cut costs by £600 for a typical heavy lorry and by £912 for the biggest vehicles.
The announcement follows warnings from the logistics sector that fuel costs have risen sharply in recent months. Logistics UK welcomed the move, describing the delay to the fuel duty rise and the road tax holiday as a “vital lifeline” for the sector.
Ben Fletcher, Chief Executive of Logistics UK, said the cost of filling a large HGV had risen by 31% in the past three months to around £1,000 a tank.
“This cannot be absorbed by an industry operating on incredibly narrow margins,” Fletcher said.
He added that deferring the fuel duty rise and introducing the 12-month road tax holiday would help operators plan with greater confidence and limit the inflationary impact on consumers.
Fuel duty rise delayed until end of year
Logistics UK said the phased 5p-per-litre increase in fuel duty, which had been planned from September, has now been postponed until the end of the year. The government said the fuel duty cut would continue to apply to petrol and diesel, while red diesel users, including farmers and rail freight operators, would also see duty cut by more than a third until the end of the year.
According to Logistics UK, the rise in fuel prices since the start of the Middle East conflict has already increased Treasury tax receipts by £42 million.
The £1 renewal measure is most relevant to UK-registered HGVs renewing vehicle tax. It should not be read as a general exemption from UK road charging for foreign trucks entering the country.
GOV.UK guidance states that the HGV levy applies to non-UK-registered HGVs, while UK-registered HGVs pay the levy with their vehicle excise duty. Non-UK HGVs must pay the levy for any day they use a main road in the UK if the vehicle weighs 12 tonnes or more and is not exempt.
The guidance also notes that main roads include A-roads and motorways, and that almost all roads from UK ports are classed as main roads.
For international operators, this means the UK fuel duty decision may affect pump prices, but the road tax holiday itself appears to apply to UK vehicle tax renewals rather than replacing the separate levy system for non-UK registered HGVs.
