The Autumn Budget 2026 has brought some welcome certainty for UK motorists and businesses, with Chancellor John Healey extending the fuel duty freeze until July 2027 and confirming changes to business mileage allowances.
There is also new funding to reduce public EV charging costs, alongside further details on the mileage-based tax for electric vehicles announced last year.
However, with petrol and diesel prices remaining high, the Budget offers more protection against further increases than meaningful reductions in the cost of running a fleet.
Here's The Right Fuel Card's breakdown of the key announcements and what they mean for UK businesses.
Fuel duty freeze extended until July 2027
The Government has confirmed that the existing 5p-per-litre cut in fuel duty will remain in place until 30 June 2027. Fuel duty on standard petrol and diesel will therefore remain at 52.95p per litre, with the planned inflation-linked increase also postponed until July 2027.
For businesses operating petrol and diesel vehicles, the extension prevents an additional increase in costs at a time when fuel prices are already placing considerable pressure on operating budgets.
However, the freeze does not mean cheaper fuel. With diesel prices having exceeded £2 per litre during October, many businesses will have hoped for measures that went further than maintaining existing relief.
Unless the policy changes again, the 5p cut is due to end on 1 July 2027, when fuel duty will also increase in line with inflation.
Business mileage allowances increased
Employees and self-employed workers who use their own cars or vans for business journeys will benefit from changes to Approved Mileage Allowance Payments (AMAP).
Earlier this year, the Government increased the tax-free mileage rate from 45p to 55p for the first 10,000 business miles.
The Budget confirms that this increase will become permanent, while the allowance for mileage above 10,000 miles will rise from 25p to 35p from April 2027.
This means the rates will be:
55p per mile for the first 10,000 business miles.
35p per mile for each additional business mile from April 2027.
The Government estimates that around three million employees and self-employed workers could benefit, with those driving 15,000 business miles annually potentially receiving up to £300 in additional tax savings.
These allowances are particularly relevant to sole traders, tradespeople and employees using personal vehicles for business purposes.
It's important to note that AMAP rates set the amount employers can reimburse without creating an additional tax liability. They do not require employers to pay the full allowance.
£100m announced to reduce public EV charging costs
The Budget includes £100 million over two years to make lower-powered public EV charging more affordable.
The funding is expected to take effect from spring 2027, with the Government estimating that drivers who rely on on-street charging rather than charging at home could save around £150 annually.
This could be particularly useful for sole traders, small businesses and drivers who do not have access to private charging facilities.
The Government has also announced a taskforce to explore whether drivers could use their domestic electricity tariffs at local public chargepoints. However, this remains a longer-term proposal, with implementation details still to be confirmed.
Despite calls from the EV industry to reduce VAT on public charging, the standard 20% rate remains in place. The new funding therefore represents a targeted intervention rather than a wider reduction in charging taxation.
Red diesel relief and HGV support extended
Businesses using red diesel will also benefit from an extension to existing duty relief.
The Government has confirmed that the additional 3.7p-per-litre reduction in red diesel duty will continue until July 2027. This will provide continued support for eligible users in sectors including agriculture, rail freight and other fuel-intensive industries.
Meanwhile, the previously announced Vehicle Excise Duty (VED) holiday for most HGVs remains in place. Introduced in July 2026, the measure allows eligible HGV operators to pay a reduced annual VED rate of £1 for qualifying licences or renewals taken out before July 2027.
The Government estimates that this measure saves around £600 for a typical HGV. These extensions offer some protection against higher operating costs, although neither represents a further reduction beyond the relief already available.
New details on the EV mileage tax from 2028
Last year's Autumn Budget introduced plans for Electric Vehicle Excise Duty (eVED), a mileage-based tax scheduled to take effect from April 2028.
The charges remain unchanged at:
3p per mile for fully electric cars.
1.5p per mile for plug-in hybrid cars.
The 2026 Budget provides further information on how the scheme will operate. The Government plans to introduce an online mileage estimation tool when the tax launches in April 2028.
It is also developing an optional system called eVED Connect, which could allow drivers to report mileage automatically through their vehicles' built-in connectivity.
An automated refund system is also planned by 2030, making it easier to recover overpayments where motorists overestimate their annual mileage or sell their vehicles.
Further guidance specifically for fleet operators is expected before the end of 2026.
Although the tax itself is not a new announcement, the additional details should help businesses begin preparing for the administrative and financial implications of its introduction.
Other vehicle tax changes
The Budget also confirms that Vehicle Excise Duty rates for cars, vans and motorcycles will increase in line with Retail Prices Index inflation from April 2027.
Standard HGV VED rates and the HGV levy are also scheduled for inflation-linked increases, subject to the existing temporary VED relief for qualifying vehicles.
For company car drivers, the Government has confirmed that Benefit in Kind rates for zero-emission vehicles will increase to 10% in the 2030/31 tax year, continuing the gradual rise in electric company car taxation.
These changes mean businesses planning future vehicle purchases or replacements will need to consider taxation alongside fuel consumption, charging costs and the wider expense of operating each vehicle.
What the Autumn Budget 2026 means for UK fleets
Compared with last year's Budget, the latest announcements introduce relatively few major changes to fleet taxation or vehicle operating costs.
The extended fuel duty freeze is welcome, particularly given the pressures facing businesses that depend on petrol and diesel vehicles. However, maintaining the existing rate does little to address the high prices businesses are already paying at the pump.
Higher mileage allowances provide more meaningful support for workers using their own vehicles, while the public EV charging measures could help make electric motoring more accessible for those without home charging facilities.
For fleet operators, the immediate priorities remain largely unchanged: monitoring fuel expenditure, reviewing vehicle running costs and preparing for future taxation changes.
With fuel prices remaining unpredictable, choosing the right fuel card can help businesses keep track of purchases, simplify administration and identify opportunities to reduce unnecessary spending.
Explore our fuel cards to find an option suited to your business and the way your vehicles operate.
This article was written on Wednesday, 28th October 2026 and published on Wednesday, 28th October 2026. All information contained within is correct at the time of writing. We try our best to continue to update our guides, but not all guides are regularly reviewed - for the latest news and insight visit: rightfuelcard.co.uk/news-insights
