Fleet costs
The temporary £1 HGV tax rate: what fleet operators need to know
Most eligible HGVs taxed between 1 July 2026 and 30 June 2027 now receive a temporary £1 Vehicle Excise Duty rate.
A temporary Vehicle Excise Duty measure came into effect on 1 July 2026. It is a welcome reduction, but it does not remove every road charge attached to an HGV.
Who receives the rate
The £1 rate applies to most vehicles in HGV, Trailer HGV, Small Island, Combined Transport and Special Types tax classes. It is applied automatically when an eligible vehicle is taxed during the twelve-month window.
Vehicles taxed before 1 July 2026 do not receive a retrospective refund. The reduced rate becomes available at the next renewal that falls within the qualifying period.
The levy remains separate
Where an HGV is also subject to the HGV levy, that levy remains payable at the current rate. Operators should therefore keep VED and the levy as separate lines in fleet budgets rather than treating the announcement as a complete removal of road taxation.
A practical fleet check
Confirm the tax class on each V5C, note the renewal date and check that the online renewal shows the correct rate before payment.
A simple renewal register gives finance and transport teams one reliable view of when the temporary rate should appear. It also reduces the risk of treating the measure as a refund or overlooking the separate levy when forecasts are updated.
- Review vehicles renewing between 1 July 2026 and 30 June 2027
- Keep levy costs in the operating budget
- Escalate any incorrect renewal rate before completing payment
