The Chancellor will deliver the Autumn Budget on 26 November, with several measures expected to directly affect fleets. The headline change is likely to be a new 3 pence-per-mile tax for electric cars, applied from April 2028 and charged in addition to Vehicle Excise Duty (VED) — the annual tax paid to legally operate a vehicle on public roads. Hybrids are expected to pay a lower rate, while electric vans are set to be exempt.
Drivers would self-declare their mileage annually rather than being electronically tracked. Industry bodies warn the move risks slowing EV demand, particularly as the retail market remains “sluggish” and salary sacrifice schemes could be hit by rising total cost of ownership.
Potential adjustments to fuel duty, a review of Motability scheme eligibility, and further clarity on Benefit-in-Kind (BiK) rates are also expected, as the Treasury looks to plug falling fuel duty receipts.
Despite concerns, the underlying electrification trend remains strong. According to the SMMT, battery electric vehicle transactions rose 44.4% in Q3, taking a record 4.0% share of the used market, the fastest growth of any powertrain.