Electric heavy goods vehicles and buses

Electric vehicles (EVs), unlike internal combustion engine (ICE) vehicles, are not subject to fuel excise duties. To maintain parity between ICE vehicles and EVs, the Additional Flat Component (AFC) was introduced for electric cars and light goods vehicles in Budget 2020. This helps the Government to balance the loss of revenue from fuel excise duties, as the Government encourages the adoption of electric vehicles.

The AFC has now been extended to electric heavy goods vehicles (HGVs) and buses registered from 1 January 2026. The amount of AFC is based on the maximum laden weight of the vehicles, and charged at stepped-up amounts over three years to provide a transitional period for businesses to adapt. The following is the six-monthly AFC which will be included in the road tax payable for the various types of HGVs and buses:

As this AFC will likely increase operational costs for businesses using electric HGVs and buses, businesses may wish to explore incentives such as the Heavy Vehicle Zero Emissions Scheme to offset the increased costs of transitioning to a greener vehicle fleet.