The UK’s first female chancellor of the exchequer has delivered her first Budget since taking office on 4 July.
While much of Rachel Reeves’ first Budget was either broadly in line with expectations, or had been announced early, a move criticised by the deputy speaker of the house, there were some new announcements and significant surprises.
Fuel duty and the windfall tax
In a surprise to many, Reeves announced that the government would not be scrapping the 5p fuel duty cut, instead freezing fuel duty for a full year. The government notes that this is a tax cut worth around £3 billion that is expected to save the average driver around £60 each year.
Much less surprising is the confirmation of a previous announcement that the Energy Profits Levy (EPL), otherwise known as the windfall tax, would be increasing. The EPL was originally instituted in 2022 following the immense profit growth of oil and gas firms during the energy crisis, pushing oil and gas firms to pay a 25% tax on “exceptional profits”. This was later increased to 35% in January 2023, and Reeves has now formally confirmed it will rise to 38%, with the scheme extended to March 2030. The 29% investment allowance will be removed, while the 100% first year allowance and the decarbonisation allowance will be maintained.
EV incentives and the automotive industry
Reeves noted that the government wants to support uptake of electric vehicles (EVs) and thus will maintain existing incentives for EVs in company car tax.
Read more: Current+
