Chancellor John Healey’s first Autumn Budget has delivered a mix of good news and added costs for fleet operators. While businesses will welcome another extension to the fuel duty freeze and greater certainty around company car tax, there are also confirmations of future charges for electric vehicles that fleets will need to factor into their plans.
Fuel Duty Freeze Extended
In a move that will benefit businesses running diesel and petrol vehicles, the Government has extended the fuel duty freeze and retained the 5p per litre cut until 1 July 2027.
With diesel prices having risen sharply throughout 2026, this provides some welcome short-term relief for fleet operators facing higher running costs.
More Certainty on Company Car Tax
The Budget also provides an extra year of certainty on Benefit-in-Kind (BIK) rates.
Fully electric company cars will continue on the previously announced path from 4% BIK in 2026/27 to 9% by 2029/30, before increasing to 10% in 2030/31. While rates are gradually rising, electric vehicles remain significantly more tax-efficient than petrol and diesel alternatives.
Higher Mileage Allowance for Drivers
Drivers using their own vehicle for business travel will see an improvement in mileage tax relief.
The 55p per mile allowance for the first 10,000 business miles has now been made permanent, while the rate paid above 10,000 miles rises from 25p to 35p per mile. This will be particularly welcome news for high-mileage business drivers.
Electric Vehicle Road Charging Confirmed
The Government has reaffirmed plans to introduce mileage-based road charging for electric vehicles from April 2028.
Known as eVED, the scheme will charge fully electric vehicles 3p per mile and plug-in hybrids 1.5p per mile. For example, an electric vehicle covering 20,000 miles annually could incur around £600 per year in charges.
The Government says new digital tools and automated reporting options will be available to help motorists and fleet operators manage the system.
What Fleet Businesses Should Take Away
The 2026 Autumn Budget offers some immediate support through fuel duty relief and improved mileage rates, while also providing longer-term tax certainty for company car fleets. However, businesses transitioning to electric vehicles should begin preparing now for the introduction of mileage-based charging from 2028.
For fleet operators, understanding the full cost of running both traditional and electric vehicles remains more important than ever. At TCH Leasing, we’re here to help businesses evaluate their options and build a fleet strategy that works both today and in the years ahead.