With the UK preparing for a fundamental shift in how road use is taxed, seven business groups have joined force to create the Road Pricing Coalition.

The Chancellor is facing significant pressure on the public finances and an increasingly urgent challenge over how road use will be taxed as fuel-duty revenues decline.

Fuel duty raised around £24.4 billion in 2024/25, but the Office for Budget Responsibility (OBR) expects receipts to halve during the 2030s and approach zero by 2050/51, as the vehicle fleet electrifies.

Fuel duty and vehicle excise duty (VED) currently generate more than £33bn a year, and it is not ring-fenced for transport spending, meaning its decline has implications for the wider public finances as well as the road network.

At the same time, road use is not disappearing: vehicles travelled 342.6 billion miles on Great Britain’s roads in 2025, 1.2% more than before the pandemic.

To coincide with the coalition’s launch, it has published Paying for our Roads: The decline of fuel-duty revenues and the choices ahead, which examines the scale of the fiscal challenge, the choices facing Government and lessons from road-charging systems around the world.

The report sets out the scale of the challenge created by declining fuel-duty revenues, looks at how other countries have responded, and examines some of the considerations the UK Government will need to make in the years ahead.

Rather than backing a particular model, the coalition argues that any future reform should first meet five tests to ensure it is fair, workable and supports the wider economy. 

The Government has already begun that transition through Electric Vehicle Excise Duty (eVED), which will introduce a mileage-based charge for electric, hydrogen and plug-in hybrid cars from April 2028.

Battery-electric and hydrogen cars will initially pay 3p per mile and plug-in hybrids 1.5p per mile. However, vans, HGVs and other vehicle types are outside the initial scheme, and the OBR estimates eVED will offset only around a quarter of the longer-term decline in fuel-duty revenues.

The coalition says this means the debate over the future of motoring taxation is only beginning, and that businesses which rely on the road network need to be involved before wider decisions are fixed.

Further information:

Fleets prepare for undamental shift in how road use is taxed | Tax and Legislation