Budget aims to curb inflation and maintain fuel freeze

Following an Autumn Budget which increased clarity for electric fleets, the Spring Budget 2023 was focused on steps to curb inflation, freeze fuel duty and manage energy costs. While there were no huge surprises, the changes focus on easing financial pressures. 

Fuel duty remains frozen
For fleets operating petrol and diesel vehicles, the Chancellor froze fuel duty for a further 12 months and extended the temporary 5p fuel duty cut, cancelling the planned increase in line with inflation for 2023-24. The Government estimates that this extension will be worth around £200 for the average car driver.

Relevant to electric vehicles (EVs)
Unlike the Autumn Budget, there was less to report for fleets transitioning to EVs. Although there was no added impetus to switch to an EV earlier – particularly for van fleets – the previous incentives announced in autumn are largely maintained.  

    • The government is maintaining the Energy Price Guarantee (EPG) at its current £2,500 for a further three months from April to June 2023. This helps to manage electric vehicle charging costs for drivers, when coupled with HMRC increasing the average electricity rate (AER) to 9 pence per mile from 1 March.  
    • Benefit in Kind Taxation (BiK/company car tax) was also not adjusted from the Autumn Budget, providing greater clarity for longer by keeping BiK rates lower for EV salary sacrifice and company car drivers until the 27/28 financial year ends. 
    • Despite calls from fleet trade bodies, VAT was not reduced on public charging. 

Vehicle Excise Duty (VED)
There was no change to VED rates for electric vans, all rates will increase in line with Retail Price Index in April. 

Read more about the Spring Budget on gov.uk.