To improve road safety and air quality within the UK, a series of initiatives are being introduced both a national and local level. These include the ULEZ, expiration of reduced fuel duty rates, new number plates and more. We explain the key changes.

Ultra Low Emissions Zone (ULEZ) expansion

The Ultra Low Emission Zone (ULEZ) is an area in London where vehicles that contribute to high pollution are charged a daily rate of £12.50. This charge was implemented to discourage high levels of driving and to persuade drivers to choose vehicles that are lower in emissions to improve the city’s air quality.

Currently, the ULEZ includes all roads within the North and South circular roads and, from 29 August 2023, this will expand to all 33 boroughs of London. This law applies to cars, motorcycles, vans, specialist vehicles (up to and including 3.5 tonnes), and mini buses (up to and including five tonnes).

TFL scrappage scheme

Following on from the ULEZ expansion, the Mayor of London announced a TFL scrappage scheme worth £110 million. This scheme will come into effect from 30 January 2023 and is to help low-income motorists to switch to ULEZ-friendly vehicles by paying a fee to scrap non-compliant vehicles and use greener modes of transport.

Other parts of the UK also provide a similar scheme, such as Birmingham and Scotland, and manufacturers like Kia and Renault have their own scrappage schemes too.

Fuel duty rates

In the Chancellor’s Spring Statement last year it was announced fuel duty rates would be reduced by 5p to help those struggling with the increase of fuel prices and the cost of living crisis. The fuel duty reduction came into play on 23 March 2022.

This reduction was set to last for 12 months and, as of 23 March 2023, fuel duty rates will return to normal. However, it has been suggested the Office for Budget Responsibility (OBR) advises there may be an increase, this will be outlined and confirmed in this year’s Spring Statement.

Benefit in Kind (BiK) rates

The Government announced that Benefit in Kind (BiK) contributions will be frozen until April 2025 in an effort to encourage individuals to choose electric vehicles.

BiK is services provided to employees either for free or at a great reduction in price. Company cars fall under a percentage of BiK contributions, and these rates have been creeping up through the years. In 2013 a petrol car that produces 100g/KM emissions paid 13% BiK and now BiK contributions stand at 25%.

Heavy goods vehicle levy

Heavy goods vehicles (HGVs) that weigh over 12 tonnes are charged a levy cost for wear and tear on British roads.

During the pandemic, the levy was suspended for UK-registered HGVs and was extended for another 12 months to August 2022. From August this year, the levy will be lifted meaning companies will start paying extra costs.

Vehicle Excise Duty (VED)

In last year’s Autumn Statement the Chancellor, Jeremy Hunt announced that zero-emission vehicles will start paying tax from April 2025.

This means for the next two years owners of electric vehicles can enjoy 0% Vehicle Excise Duty (VED) but diesel and petrol car owners will pay the minimum VED rate of at least £165.

Vehicle Registration Mark (VRM)

Twice a year the UK has a new set of registration number plates, a set on 1 March and another on 1 September.

From March this year, motorists can register a new vehicle under the 23 registration plate and in September under a 73 plate.