The measure was confirmed by Treasury minister Dan Tomlinson in response to a parliamentary question from Liberal Democrat MP David Chadwick. The government says the 12-month VED holiday will save £600 for a typical heavy lorry.
The temporary reduction applies to the majority of HGVs renewing their VED during the 12-month period. The eligible tax classes listed by the Treasury are:
- standard HGV — tax class 1
- trailer HGV — tax class 2
- special types — tax class 57
- combined transport — tax class 23
- island goods vehicles — tax class 16
The answer does not describe a separate application process. Instead, the relief is tied to HGVs renewing VED within the qualifying period.
However, the measure does not remove the HGV levy. The Treasury states that where a vehicle is liable for the HGV levy, it will continue to be charged at the existing rate.
The government says the tax holiday is intended to recognise the role of road haulage in moving goods across the UK, including food, and the sector’s exposure to fuel costs. It also links the decision to fuel-price pressure connected with the Iran conflict, saying the measure is intended to help prevent cost pressures from spreading across the wider economy.
Vehicles renewing VED between 1 July 2026 and 30 June 2027 should fall within the temporary £1 rate if they are in one of the eligible HGV tax classes. Vehicles still liable for the HGV levy will continue to pay that charge separately.
