HM Treasury published the Autumn Budget 2024 on 30 October 2024, ordered by the House of Commons to be printed the same day1. The Budget sets out tax and spending decisions affecting household energy costs, motoring and the government's energy investment plans.
The Energy Profits Levy (EPL) on oil and gas companies rises from 35 per cent to 38 per cent, the 29 per cent investment allowance is removed, and the levy is extended until 31 March 20301. The government states that 100 per cent first-year allowances in the EPL will remain, and that it "will consult in early 2025 on how the oil and gas tax regime should respond to price shocks once the EPL ends in 2030"1. The Budget also refers to "launching Great British Energy"1.
On motoring costs, the government is freezing fuel duty and extending the temporary 5p cut for one year, at a cost of £3 billion next year, which it says will save the average car driver £59 in 2025-261. For electric vehicles, the Budget widens the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars, maintains EV incentives in the Company Car Tax regime, and extends 100 per cent First Year Allowances for zero emission cars and EV chargepoints for a further year1.
For households facing hardship, the government will provide £1 billion, including Barnett consequentials, to extend the Household Support Fund and Discretionary Housing Payments in 2025-26, "which will be used by local authorities to address immediate hardship and crisis"1. The Budget also states that public sector net investment will average 2.5 per cent of GDP over the next five years, supported by £100 billion additional capital investment, taking total departmental capital spending to £131 billion in 2025-261. Energy Security and Net Zero departmental spending is given as 6.4, 9.0 and 10.3 across the years shown, and construction costs for expected on-balance sheet CCUS and Hydrogen projects are listed as "subject to decision"1.
"The government is increasing the rate of the Energy Profits Levy (EPL) from 35% to 38%, removing the 29% investment allowance, and extending the levy until 31 March 2030."
| Measure | Change |
|---|---|
| Energy Profits Levy rate | 35% to 38% |
| EPL investment allowance | Removed (29%) |
| EPL end date | Extended to 31 March 2030 |
| Fuel duty | Frozen, 5p cut extended one year |
| Average car driver saving, 2025-26 | £59 |
| Household Support Fund and Discretionary Housing Payments, 2025-26 | £1 billion, including Barnett |
Why it matters for households
The EPL changes affect the taxes paid by oil and gas producers, not household bills directly, and the Budget does not state what effect they will have on retail energy prices1. The fuel duty freeze keeps the temporary 5p cut in place for another year, which the Treasury values at £59 for the average car driver in 2025-261. For homes considering a switch to electric motoring, the Budget keeps company car tax incentives and extends 100 per cent first-year allowances for zero emission cars and chargepoints, while widening first-year VED differentials between EVs and other cars1. The £1 billion for the Household Support Fund and Discretionary Housing Payments is directed through local authorities for immediate hardship and crisis support in 2025-261. Rules on the energy performance and labelling of appliances that households buy sit under separate energy labels and ecodesign rules, and wider policy changes are collected in the regulation and policy hub.
What happens next
The employer National Insurance changes take effect from 6 April 20251. The government will consult in early 2025 on how the oil and gas tax regime should respond to price shocks once the EPL ends in 20301. No date has been reported for the launch of Great British Energy or for decisions on the CCUS and Hydrogen construction costs listed as subject to decision1.