The Autumn Budget 2026: What fleet operators need to know

October 28, 2026

The Autumn Budget brings a mixed outlook for fleet operators and company car drivers, with extended fuel duty relief and higher business mileage allowances offering short-term support, while future electric vehicle taxation remains a key consideration.

Fuel duty freeze extended to July 2027

The Chancellor has extended the existing 5p-per-litre fuel duty cut until July 2027, providing continued relief for petrol and diesel fleets amid volatile fuel prices. However, pump prices will remain influenced by wholesale costs and retailer pricing.

Business mileage allowances increase

Tax-free Approved Mileage Allowance Payments (AMAP) will become more generous for employees using their own cars or vans for business journeys. The changes will benefit around three million people. We've laid out a table of the previous and new allowances.

Business mileage	Previous allowance	New allowance*
5,000 miles	£2,250	£2,750
10,000 miles	£4,500	£5,500
15,000 miles	£5,750	£7,250
20,000 miles	£7,000	£9,000

(Illustrative maximum tax-free reimbursement once both changes apply). The 55p-per-mile rate for the first 10,000 miles becomes permanent, while the rate above 10,000 miles rises from 25p to 35p from April 2027. Actual payments depend on employer policy.

EV mileage taxation remains on track

Electric Vehicle Excise Duty (eVED) remains unchanged and is scheduled to continue from April 2028, adding a mileage-based charge alongside Vehicle Excise Duty.

Vehicle type	Initial eVED rate
Battery-electric cars	3p per mile
Plug-in hybrids	1.5p per mile
Hydrogen fuel-cell cars	3p per mile
Electric vans	Excluded at introduction

As an example, a battery-electric car covering 20,000 miles annually would incur £600 in eVED at the initial rate.

Electric company car tax continues to rise

Benefit-in-kind (BIK) rates for zero-emission company cars will increase gradually, although they remain comparatively low against many petrol and diesel alternatives.

Tax year	Electric car BIK rate
2026/27	4%
2027/28	5%
2028/29	7%
2029/30	9%

Household electricity VAT relief extended

The Chancellor announced an extension of the temporary reduction in VAT on household electricity until July 2027, with an estimated £50 reduction in the annual household energy price cap.

For company car drivers charging at home, the implications will depend on their tariff and reimbursement arrangements. This announcement does not establish a reduction in the 20% VAT rate on public EV charging.

What fleet managers should do next

Fleet managers should update fuel budgets, review grey-fleet reimbursement policies and include eVED and rising BIK rates in future whole-life-cost calculations. The Budget provides immediate support for fuel and business mileage, but businesses should continue planning for the changing cost of fleet electrification.

This is a breaking news story, to which this article is being updated as and when we get hold of more information.

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