The UK government has introduced a new road tax framework that creates a divergence in annual cost increases for motorists based on vehicle type. Under the new policy, electric vehicles (EVs) and plug-in hybrids will see their tax rates adjusted annually in line with the Consumer Price Index (CPI).
Conversely, traditional Vehicle Excise Duty (VED) and fuel duty for petrol and diesel-powered vehicles will continue to be uprated using the Retail Price Index (RPI). Because the RPI typically tracks approximately one percentage point higher than the CPI, the policy effectively ensures that owners of internal combustion engine (ICE) vehicles will face higher annual tax increases than their EV counterparts.
The decision has drawn criticism from motoring advocacy groups. Brian MacDowell of the Alliance of British Drivers described the policy as a “two-tier system,” arguing that linking tax hikes to the vehicle’s power source is inherently unfair. MacDowell stated, “Giving EV owners more favourable rate increases is an extortion for petrol and diesel drivers,” characterizing the move as discriminatory toward traditional vehicle owners.
The government maintains that these adjustments are part of broader fiscal planning, though the disparity between the two inflation measures remains a point of contention for industry observers and taxpayers alike.