Spring Forecast 2026: Fuel duty freeze, road tax hikes and what every driver needs to know
Mon, 02 Mar 2026
The Chancellor will deliver her 2026 Spring Forecast this week – the government’s new name for the traditional Spring Statement.
Rachel Reeves has made it clear this will provide an update on the economy and public finances, rather than announcing new policies. She will make a statement in Parliament in response to an Office for Budget Responsibility (OBR) update to be published on Tuesday 3 March.
⏱️ 60-second summary:
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However, while no major new tax policies are expected, there will still be implications for motorists with announcements made in the Autumn Budget 2025 looming.
While the Chancellor updates the budget, many drivers are still asking "why can’t I buy a petrol car?" due to the ongoing ZEV mandate.
Fuel duty
In the Autumn Budget 2025, the Chancellor extended the fuel duty freeze, including the ‘emergency’ 5p a litre fuel duty freeze imposed by former Chancellor Rishi Sunak in 2022.
The extension was until September 2026. After this, the 5p a litre emergency cut is scheduled to be unwound in stages. According to pre-Forecast briefings, 1p a litre will be added in September, 2p a litre in December, and a further 2p a litre in March.
By April 2027, fuel duty will be back to pre-2022 levels – but still frozen at the 2012 level of 52.95p a litre.
Will fast-developing crisis in the Middle East force the Chancellor to change her mind? Oil prices are already rising, with some analysts warning it could go over $100 in the event of a prolonged conflict, reports the BBC.
A barrel of oil is currently around £78.
FairFuel UK founder Howard Cox is certainly urging the Chancellor to take action. “Rachel Reeves must declare in her Spring Forecast that fuel duty will remain frozen for the duration of her parliament and cancel any planned changes in the Autumn Budget,” he said.
Pay-per-mile
No major statement is expected on the Chancellor’s EV pay-per-mile plan announced in the Autumn Budget 2025 – despite it theoretically coming into force from April 2028.
The current plan is for a charge of 3p per mile for EVs, and 1.5p per mile for plug-in hybrids. Notably, no details have been announced on how it will be implemented – indeed, the government seemed surprised when flaws were pointed out in its original idea to base a mileage declaration around the annual MOT (which isn’t due until a vehicle is three years old).
The Chancellor is likely to confirm that further research is underway; more details about how EV pay-per-mile will work might be something she defers to the Autumn Budget 2026.
Road tax
VED road tax rates for 2026-27 will be confirmed in the Spring Forecast. There will be higher first-year bills for the highest-emitting cars, with the rate for cars emitting over 255g/km CO2 rising to over £5500. Those emitting 226-255g/km may rise to over £4700.
The annual rate after the first year is expected to increase from £195 to £205.
Electric cars also now pay VED road tax – £10 in the first year and £195 from then on. The latter amount may rise, but will the nominal £10 first-year rate increase too?
Expensive car supplement
The Chancellor announced in the Autumn Budget 2025 that the £40,000 ‘expensive car supplement’ will increase up to £50,000 for EVs, from 1 April 2026. She will confirm this in the Spring Forecast.
This change is something car firms have long called for, given how electric cars are often more expensive than their petrol and diesel counterparts.
The expensive car supplement, which is paid for five years from the second year a vehicle is taxed, is currently £425, and it is likely the Chancellor will announce the sum will increase in line with inflation.
Company car tax
Electric car Benefit-in-Kind for company car drivers will increase from 3% to 4% from 6 April 2026. This change has already been announced and it will increase by a further 1% in 2027, then 2%, before being capped at 9% in 2029.
The Chancellor is not expected to announce any major deviation from this plan.
What else will than Chancellor announce in the Spring Forecast 2026? Come back to HonestJohn.co.uk on 3 March for more news and reaction…
