Government measures to ease rising fuel costs

by Aitch, posted in General

The government has announced a package of measures intended to help motorists and businesses manage rising fuel costs following disruption linked to the conflict in Iran.

As part of the package, the temporary 5p fuel duty cut has been extended until the end of 2026. The government estimates that the extension will save the average driver around £120 since 2025 and will mean that fuel duty on petrol and diesel remains at its lowest level for more than 16 years.

Additional support has also been announced for the haulage sector. Hauliers will benefit from a 12-month road tax holiday, with qualifying vehicles paying just £1 on renewal. The government stated that this could save up to £600 for a typical heavy goods lorry and as much as £912 for largest vehicles on our roads.

The measures also see a reduction of over one third in the fuel duty charged on red diesel until the end of the year. Farmers, rail freight operators and other qualifying users are expected to benefit from the reduced rate, which the government says is now at its lowest level for more than 20 years.

Marking the announcement, the Prime Minister Sir Keir Starmer said:

‘I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it’s working people who feel it first. 

That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.’

Source:HM Government | 25-05-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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