Autumn Budget 2026: Impact on Your Driving Costs Explained

By Matthew Croxford · 11 Oct 2026 · Updated 20 Oct 2026

Short answer: Fuel duty stays at 52.95p per litre for the rest of 2026 regardless of the Budget, with rises to 55.95p from January 2027 and 57.95p from March 2027 already scheduled. Electric Vehicle Excise Duty, a new mileage charge, begins April 2028, measured via MOT readings. Company car Benefit-in-Kind on EVs keeps rising gradually but stays below petrol and diesel rates.

The Autumn Budget is due on Wednesday 28 October 2026, delivered by Chancellor John Healey in his first Budget since taking over the role. For anyone who drives, this one matters more than most. Fuel duty is sitting at a crossroads, a brand new tax on electric cars is edging closer, and company car tax bands keep shifting under drivers' feet. Some of what happens on the day is already locked into law. Some of it is still genuinely up for grabs. This article sorts the two out, so you know what's confirmed, what's rumour, and what it could mean for your own driving costs.

What's actually confirmed versus what's still a guess

A lot of what gets reported as Budget news every year is already written into law months beforehand, and this year is no exception. The freeze on the temporary 5p-a-litre fuel duty cut, the April 2028 start date for the new electric vehicle mileage tax, and the rising Benefit-in-Kind bands for company cars are all confirmed policy regardless of what the Chancellor says on 28 October. What's genuinely open is whether the Chancellor sticks to the existing plan, delays it again, or adds something new, such as a change to the VAT rate on public EV charging.

Fuel duty: the freeze holds for now, but 2027 is the real test

Fuel duty has sat at 52.95 pence per litre on petrol and diesel since the temporary 5p cut landed in the Spring Statement of March 2022, and it has been extended every year since. According to GOV.UK, that cut is legislated to run until 31 December 2026, with rates then rising to 55.95p per litre from 1 January 2027 and 57.95p per litre from 1 March 2027, restoring the pre-2022 rate in full. The Budget itself won't change the rate for the rest of this year, but it's the moment the Chancellor could choose to soften, delay or confirm that January rise. Given ongoing pressure on pump prices, there's a reasonable chance the government revisits the timetable rather than letting the increase go ahead as planned, though nothing is guaranteed until it's announced.

What a rise would actually cost you

A 3p rise in duty doesn't land on its own; VAT applies on top, so the real increase at the pump works out at a bit more than 3p a litre. For a typical 55-litre tank, that's a few pounds extra each fill-up, not a huge sum on its own, but it adds up over a year of regular driving. If you want to keep tabs on what you're actually paying locally, our fuel prices page tracks the national picture, and our fuel finder tool helps you find the cheapest forecourt nearby.

The new mileage tax on electric cars: eVED explained

The headline change for electric car owners is Electric Vehicle Excise Duty, or eVED, a mileage-based charge that sits alongside standard Vehicle Excise Duty rather than replacing it. According to GOV.UK, the measure was announced at Budget 2025, went out to consultation, and the government published its response in July 2026. The policy is set to begin on 1 April 2028, charging electric cars a per-mile rate and plug-in hybrids a lower per-mile rate, administered by the DVLA alongside existing VED.

How it will actually be measured

One of the more useful outcomes of the consultation was a decision on how mileage gets recorded. Rather than fitting GPS trackers or demanding extra checks, the government confirmed it will rely on mileage readings taken at a car's MOT test, with simplified arrangements for fleets and leasing companies to reduce the administrative burden. This Budget is expected to firm up the practical detail of how the system will run day to day, rather than change the rates themselves, since those were already set out in the July consultation response.

What it means if you're thinking of buying electric

None of this changes the fact that electric cars remain cheaper to run mile for mile than petrol or diesel once you factor in charging costs, even once the new mileage charge arrives in 2028. It's still sensible to think about total cost of ownership rather than just the price on the windscreen. If you're weighing up a used electric car, checking its background properly is worth doing before you commit. Our vehicle history check uses Experian data to show whether a car has outstanding finance, has been recorded as an insurance write-off or stolen, and gives you its previous keeper history, alongside import, export and scrapped status. It's a sensible step for any used car, electric or otherwise.

Company car tax: the gradual squeeze on electric Benefit-in-Kind

If you run an electric car through work, Benefit-in-Kind rates are already on a published upward path, rising gradually year on year through to the end of the decade. Even with those increases, electric company cars remain taxed at a noticeably lower rate than an equivalent petrol or diesel model, so the gap in favour of going electric hasn't disappeared, it's just narrowing slightly each tax year. This Budget isn't expected to change those bands, since they're already legislated, but it's always worth checking the current year's rate on GOV.UK before signing a new company car agreement, since the figure that applies when you take delivery is the one that counts. You can also estimate the Benefit-in-Kind tax on a specific car with our company car tax calculator.

What this means if you're buying or running a car right now

None of the headline changes above take effect immediately, which means there's no need to panic into a decision before 28 October. What's worth doing instead is using the Budget as a prompt to check your own numbers properly.

Before buying a used car, run its plate through our free reg lookup tool for its full MOT history, DVLA details, any outstanding safety recalls, and a free market valuation guide.
If you want deeper reassurance before parting with your money, our vehicle check covers finance, write-off and stolen status alongside ownership history.
If you're buying through a dealer or our marketplace and want to spread the cost, we can introduce you to car finance, subject to status and affordability, through our car finance page. This applies to dealer purchases only, not cars bought privately.
With Vehicle Excise Duty in focus this Budget, you can check what your own car's road tax costs for the year with our car tax calculator.
For wider buying advice, our guides section covers everything from running costs to what to check before you buy.

Keeping an eye on what actually changes

Budgets generate a lot of noise in the weeks beforehand, with think tanks, leasing companies and motoring bodies all publishing their own predictions. Treat anything published before 28 October as speculation rather than fact, however confidently it's written. The only figures worth acting on are the ones confirmed in the Chancellor's speech itself and the detailed documents HM Treasury publishes alongside it on the day.

The bottom line

Fuel duty stays where it is for the rest of this year regardless of what's announced on 28 October, with the real decision point being whether January's scheduled rise goes ahead. The electric car mileage tax is coming in April 2028 and its rates are already set, so this Budget is about implementation detail rather than new charges. Company car tax on electric vehicles keeps climbing gradually but stays well below petrol and diesel equivalents. None of it demands an immediate reaction, but it's a good moment to check your own car's figures are what you think they are, and to do your homework properly before any used car purchase.

This article was written ahead of the Autumn Budget on 28 October 2026 and reflects the position known at the time of writing. The figures, rates and policies described here, including fuel duty, Vehicle Excise Duty, the planned electric vehicle mileage charge and company car Benefit-in-Kind bands, may be changed, confirmed, delayed or withdrawn by announcements made in the Budget or afterwards. Always check the confirmed, current position on GOV.UK before relying on any figure quoted here. Car finance is subject to status and affordability, and our valuation guide is indicative only. MotifyMe accepts no liability for any action taken, or not taken, on the basis of this article, and recommends confirming current rates and terms with the relevant official source before making a decision.

Frequently asked questions

Will fuel duty go up in the 2026 Autumn Budget? No, the rate stays at 52.95 pence per litre for the rest of 2026 regardless of the Budget. The scheduled rises to 55.95p from 1 January 2027 and 57.95p from 1 March 2027 are the real decision point.

What is eVED and when does it start? eVED is Electric Vehicle Excise Duty, a new mileage-based charge for electric cars alongside standard VED. It starts on 1 April 2028, with plug-in hybrids charged at a lower per-mile rate.

How will mileage be measured for the new electric car tax? The government confirmed mileage will be recorded using readings taken at a car's MOT test, rather than GPS trackers. Simplified arrangements will apply for fleets and leasing companies to reduce administrative burden.

Is company car tax on electric vehicles changing in this Budget? No, Benefit-in-Kind bands for electric company cars are already legislated and rising gradually through to the end of the decade. This Budget isn't expected to alter those bands, though electric cars stay taxed well below petrol or diesel equivalents.