Direct answer: The Autumn Budget 2026 gives UK motorists short-term help through an extension of the 5p fuel-duty cut to 1 July 2027, permanent 55p-per-mile business mileage for the first 10,000 miles, a higher 35p rate above that from April 2027 and £100 million to reduce some local public EV charging costs. But VED rises in April 2027 and electric cars face a new 3p-per-mile eVED charge from April 2028.
This Budget is trying to soften high motoring costs now while preparing the tax system for falling fuel-duty revenue as more drivers switch to electric cars. Several measures make sense, but the longer-term EV tax picture is getting harder to explain.
Autumn Budget 2026: key changes for motorists
- Fuel duty: the 5p-per-litre cut continues to 1 July 2027 and the planned RPI rise is deferred.
- Business mileage: 55p per mile for the first 10,000 miles becomes permanent; the rate above 10,000 rises to 35p from 6 April 2027.
- Public EV charging: £100 million over two years will support cheaper local, lower-powered charging from spring 2027.
- eVED: from 1 April 2028, battery-electric and hydrogen cars pay 3p per mile, plug-in hybrids 1.5p.
- VED: rates rise with RPI from 1 April 2027. The standard rate for most post-2017 cars becomes £210.
- Charging VAT: public and workplace EV charging is confirmed as subject to 20% VAT from 1 November 2026.
- Company-car tax: zero-emission cars reach a 10% Benefit-in-Kind rate in 2030/31.
Fuel duty: another reprieve until July 2027
The government has cancelled plans to add 5p per litre back onto fuel duty from January 2027 and pushed both that reversal and the planned RPI increase to 1 July 2027.
HM Treasury says diesel exceeded £2 per litre in October 2026 and estimates its fuel-duty decisions will save the average car driver £230 against the previous policy baseline.
I think extending the cut is sensible. For millions, especially outside major cities, driving is not discretionary. The weakness is that July 2027 simply becomes the next date to watch.
Business mileage rates finally look more realistic
The tax-free rate for employees and self-employed people using their own car or van for work will remain at 55p per mile for the first 10,000 business miles. From 6 April 2027, the rate above 10,000 miles rises from 25p to 35p per mile.
The Treasury says somebody driving 15,000 business miles could receive up to £300 in extra tax savings. This feels overdue because the cost of using a private car for work extends far beyond fuel.
EV drivers without driveways get some overdue attention
The Budget recognises one of the biggest inequalities in EV ownership: home charging can be cheap, while drivers in flats and terraced houses may depend on much more expensive public charging.
A taskforce will explore whether drivers could use their domestic electricity tariff at local, lower-powered public charge points. Meanwhile, £100 million over two years will reduce the cost of these chargers from spring 2027. The government estimates an average on-street charging user without home charging could save around £150 a year.
I strongly support this. Access to a driveway should not determine whether an EV is economical. Tariff porting could remove a major barrier to adoption.
My nearly 600-mile EV road trip showed how much price and payment matter alongside charger availability.
Public charging still carries 20% VAT
Finance Bill 2026-27 will clarify that electricity supplied through publicly accessible and workplace EV chargers is subject to 20% VAT from 1 November 2026.
This is not a brand-new 20% tax because public charging has generally already been standard-rated. But domestic electricity is temporarily zero-rated until July 2027, leaving a stark tax gap between home and street charging.
The £100 million support is welcome, but I would rather see a long-term tax structure that directly narrows that inequality.
The EV mileage tax: 3p per mile from April 2028
From 1 April 2028, Electric Vehicle Excise Duty, or eVED, will charge battery-electric and hydrogen fuel-cell cars 3p per mile and plug-in hybrids 1.5p per mile. Rates then rise with CPI from 2029/30.
Importantly, eVED does not replace normal road tax. It sits alongside Vehicle Excise Duty.
| Annual mileage | Battery EV | Plug-in hybrid |
|---|---|---|
| 5,000 miles | £150 | £75 |
| 10,000 miles | £300 | £150 |
| 15,000 miles | £450 | £225 |
A battery-electric driver covering 10,000 miles a year would therefore pay around £300 in eVED, before ordinary VED.
I understand the principle. Fuel-duty revenue will decline while EVs still use roads, and a mileage charge means higher-mileage drivers pay more.
My concern is accumulation. EVs now pay VED, expensive models can attract the supplement, public charging is taxed more heavily than domestic electricity, company-car tax rises and eVED comes on top. Together they make switching harder to price.
How will eVED work?
Drivers will provide an odometer reading and estimate mileage for the coming tax period. Payment can be made upfront or spread across the year, with a later reading used to reconcile the amount due. Existing MOT mileage data may help check reported figures.
Budget 2026 also confirms a mileage-estimation tool and optional eVED Connect system using a car's built-in connectivity. Automated refunds are planned by 2030. I welcome the opt-in approach because a mileage tax does not need to become location tracking.
VED rises from April 2027
Vehicle Excise Duty for cars, vans and motorcycles rises with RPI from 1 April 2027. For cars first registered from April 2017, the standard annual rate becomes £210, up from £200 in 2026/27.
A zero-emission new car pays £10 in its first year in 2027/28, while a car emitting more than 255g/km faces a first-year bill of £5,950.
The Expensive Car Supplement will be £440 a year in 2027/28 during years two to six. Petrol and diesel cars trigger it above a £40,000 list price, while zero-emission cars have a £50,000 threshold.
Company-car tax remains favourable for EVs
The Budget sets Benefit-in-Kind percentages through 2030/31. Zero-emission cars reach 10%, cars emitting 1 to 50g/km move to 20%, and other bands rise by one point, capped at 40%. EVs remain attractive company cars, but the advantage keeps narrowing.
Two other changes worth watching
From 2 January 2028, larger private-hire operators will account for VAT on the full fare value. A £50 million annual turnover threshold is the lead consultation option. That does not mean fares automatically rise by 20%, but pricing could be affected.
The government also plans its Zero Emission Vehicle Mandate review response by the end of 2026, with possible 2027 changes affecting EV supply and incentives.
What does this mean for petrol and diesel drivers?
In the short term, the Budget is fairly positive. Fuel-duty relief survives winter and spring and mileage rates improve. From April 2027, VED rises again and high-emission new cars retain large first-year bills.
What does it mean for EV drivers?
The picture is mixed. Local public charging should get cheaper from spring 2027 and tariff porting could be genuinely important. Against that, EVs now pay VED, public charging retains 20% VAT and eVED adds a mileage charge from 2028.
EVs can still be cheap to run, especially with home charging, and company-car tax remains favourable. But buyers should assess the whole ownership picture rather than assume electric means minimal tax.
My verdict
There is a lot here that makes sense. Extending fuel-duty relief is pragmatic, mileage rates needed updating and tackling the public-charging penalty for people without driveways is exactly the practical intervention the EV transition needs.
Where I am less convinced is EV tax complexity. Electric cars need not be tax-free forever, but government needs a clearer story about how VED, eVED, charging VAT, the Expensive Car Supplement and company-car tax fit together.
Overall, Autumn Budget 2026 gives motorists breathing room now, but it also makes one thing clear: the era of lightly taxed electric motoring is ending. The challenge is replacing it with a system that is fair, predictable and simple.