The UK is preparing for a major change in how it taxes road use. Seven business groups have formed the Road Pricing Coalition to address this issue. The coalition includes the Road Haulage Association, Logistics UK, and British International Freight Association, among others.
The Chancellor faces pressure on public finances as fuel-duty revenues decline. In 2024/25, fuel duty raised around £24.4 billion. The Office for Budget Responsibility (OBR) expects receipts to halve during the 2030s and approach zero by 2050/51, as the vehicle fleet electrifies.
The Fiscal Challenge
Currently, fuel duty and vehicle excise duty (VED) generate over £33 billion annually. This revenue is not ring-fenced for transport spending, meaning its decline has implications for both the road network and public finances. Meanwhile, road use remains steady, with vehicles traveling 342.6 billion miles on Great Britain’s roads in 2025, a 1.2% increase from pre-pandemic levels.
The coalition has published a report, Paying for our Roads, which examines the fiscal challenge, explores global road-charging systems, and sets out considerations for the UK government in the coming years.
The Coalition’s Stance
Instead of endorsing a specific model, the coalition argues that any future reform should meet five tests to ensure it is fair, workable, and supportive of the wider economy. The Electric Vehicle Excise Duty (eVED), set to launch in April 2028, will introduce a mileage-based charge for electric, hydrogen, and plug-in hybrid cars.
Initial rates are 3p per mile for battery-electric and hydrogen cars, and 1.5p per mile for plug-in hybrids. However, vans, HGVs, and other vehicle types are outside the initial scheme. The OBR estimates eVED will offset only around a quarter of the longer-term decline in fuel-duty revenues.
The coalition emphasizes that the debate on motoring taxation is just beginning. Businesses reliant on the road network must be involved in shaping decisions. Richard Smith, managing director of the Road Haulage Association, stated, “Road transport is an enabler of the whole economy.
Our members move the goods that keep businesses operating and communities supplied, so changes to the way road use is taxed will be felt far beyond the haulage sector. A cross-sector coalition gives industry a stronger voice to make sure future reforms are workable, proportionate and support growth.”
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Gareth, with over 30 years of journalism experience, leads the news agenda for Fleet News. His expertise covers fleet electrification, tax changes, and legislation affecting the sector. Gareth ensures fleet leaders receive the latest information to manage their operations efficiently.
