Autumn Budget 2026: the fleet industry responds

October 28, 2026

The Autumn Budget 2026 has delivered a mixed package for the fleet industry, offering some immediate relief on fuel costs while raising important questions about the long-term cost of running electric vehicles.

Chancellor John Healey has extended the 5p-per-litre fuel duty cut until July 2027, providing welcome breathing space for businesses facing rising petrol and diesel prices. The Government has also confirmed more generous tax-free business mileage allowances, with the rate for journeys above 10,000 miles increasing to 35p per mile from April 2027.

However, the planned introduction of electric Vehicle Excise Duty (eVED) from April 2028 and rising benefit-in-kind (BiK) rates for electric company cars remain key considerations for fleet managers and drivers.

FleetWise has gathered the opinion of industry experts to analyse specific parts of the 2026 budget.

The impact on fleet electrification

Matt Dale, Director of TZConsultancy, said the budget doesn't 'materially change' fleet electrification policy with little said about 'transport in general'. "It strengthens the economic case for electrification through lower energy costs, industrial competitiveness measures and continued support for electricity affordability."

Dale sees a potential impact for businesses planning to install EV charging points; "The new British Industrial Competitiveness Scheme which will provide a 20-25% discount on electricity to around 10,000 energy intensive manufacturers from April 2027 could be relevant where those businesses have installed or are thinking of installing Depot/office chargers for fleet or employees."

While not specific to fleets, Dale highlights a key EV backing proposal: "The budget document includes the statement 'Cheaper electricity will boost electrification, increasing the UK's energy security and helping to decarbonise the whole economy' which is a significant policy direction and provides stronger government backing for electrification than many recent fiscal statements."

Fuel duty freeze

The RAC has warned that extending the 5p-per-litre fuel duty freeze until July 2027 offers limited relief for drivers facing soaring fuel costs.

RAC senior policy officer Rod Dennis said: “A freeze only avoids making an already difficult situation worse – it doesn’t make filling up any cheaper.” He added that nearly two-thirds of regular drivers surveyed wanted cuts to fuel duty or VAT, with many reducing other spending to cope with high prices.

Dennis also highlighted the cost of public EV charging, where VAT remains at 20%, compared with 0% on domestic electricity in Great Britain.

“Reducing VAT on public charging would have been an obvious way for the Government to make the switch more accessible for more people,” he said, calling for greater affordability for drivers unable to charge at home.

Business mileage allowances increase

The Association of Taxation Technicians (ATT) has welcomed the Government’s decision to increase tax-free business mileage rates, describing the move as the “right road to travel”, while calling for further changes to simplify the system and better reflect vehicle running costs.

Chancellor John Healey confirmed that the 55p-per-mile rate for the first 10,000 business miles will become permanent, while the rate for additional mileage will rise from 25p to 35p per mile. The changes will benefit employees and self-employed people using their own vehicles for work, particularly those covering high annual mileages.

Jon Stride, Chair of the ATT’s Technical Steering Group, said: “Increasing the higher-mileage rate to 35p therefore partly addresses that concern.”

The ATT believes further reform is needed, having proposed a single rate of at least 60p per mile to remove the sharp drop in support after 10,000 miles.

Stride added: “We would also like to see the Government address the rates for motorcycles and bicycles, which were left unchanged earlier this year, and commit to reviewing all approved mileage rates regularly so they do not once again fall significantly behind the costs faced by workers.”

'Many questions remain unanswered'

Philip Northard, Insight Director of Cox Automotive International, said: “It is positive to see today’s budget include a raft of announcements aimed at easing pressure on the cost of living.

"As such, we hope this translates into improved consumer confidence and higher demand in the new and used car markets. It is also positive to see no obvious increase in taxation for buyers and improved support for the electric vehicle industry, but many questions remain unanswered."

Northard said that, despite the additional details of the budget, the shape and outcome of the eVED scheme and ZEV mandate consultation "remains to be seen".

"The true test will be the outcome of the EU-UK Summit, which could bring news of tariffs, Made in Europe, Euro7 and Rules of Origin regulations, and the Bank of England’s interest rate decision next week.”

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