Motorists pay more than half of £54.3bn UK environmental taxes

Richard Aucock, Contributor
Tue, 13 May 2025

New figures from the Office of National Statistics reveal motorists are forking out for more than half the £54.3bn raised in environmental taxes in the UK last year.

Fuel duty alone made up 45% of the total environmental tax take – and has been the largest single contributor to total environmental energy tax revenues since back in 1997.

Environmental energy taxes also include broader renewable energy obligations of around £8bn – but this a figure that pales in comparison to the £24.6bn raised in fuel duty. 

Energy taxes make up nearly 75% of the total UK environmental tax revenue, followed by transport on 23.3%.

Of this £12.6bn total, motor vehicle duty – Vehicle Excise Duty, or car tax – totalled £5.1bn, or around 40% of the total transport-related tax take.

Air Passenger Duty was the next-highest environmental tax, at £4.2bn.

Further motoring-related cash was raised from motor vehicle duties paid by business, plus the Dartford Toll.

The AA, which has crunched the numbers, says that drivers will be staggered by how much the burden of fuel duty contributes to environmental tax in the UK.

"Most will accept that fossil fuel car use comes with some level of tax penalty, but the share of the tax-take will be a shock," says head of roads policy Jack Cousens.

The AA agrees with the ‘polluter pays’ principal of environmental tax – providing it is proportionate. Cousens did add that the AA recognises that fuel duty has also been frozen since March 2011.

However, he also warned about the ever-growing "swathe of environmental taxes" being levied by councils against motorists.

"This local tax free-for-all is usually disguised as ‘charges’ and has ballooned largely unchecked since 2008," he adds.

Such local council environmental taxes – "including those that can reasonably be labelled as stealth taxes" – include CO2-related and diesel-related residents parking permits, diesel-related public parking charges, workplace parking levies, plus city or town parking costs where the council has stated a CO2 justification for high fees.

Cousens argues that such is the range of local environmental motoring taxes - and the huge amount of money being collected by them - that this needs to be accounted for and laid bare to the public.

"The ONS Environmental Tax tally needs to include them for proper transparency. It requires clarity to reveal the truth."

Ask HJ

Do I need to tax my car if the VED rate is zero?

I own a Skoda Citigo GreenTech which is tax exempt, do I have to reapply to keep free tax?

Even if your car qualifies for the zero rate of VED, you still need to go through the process of taxing your car, which you can do by post, via phone or online, and you can find more information here - https://www.gov.uk/vehicle-tax It is important to note the difference between a vehicle being tax exempt - such as one that is 40 years old - and cars such as yours, that are required to be taxed but no charge is applied.

Answered by David Ross

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