Will the Autumn Budget 2026 make driving more expensive?
Car changing is a big deal
The Autumn Budget could bring important changes for motorists, from fuel duty and EV charging costs to company car tax and pay-per-mile charges. Here’s what drivers should watch out for.
Drivers could be in for a shake-up this autumn.
Chancellor John Healey will deliver the Autumn Budget on 28 October 2026, but what could it include for motorists – and how might it affect the cost of driving?
From what you pay at the pump to the cost of owning an electric car, here’s what drivers need to look out for.
Remember, you can buy a brand new or used car right here on Carwow. And you can sell your car, too. We’re here to help you through every step of your car-changing journey.
Fuel duty: no change this year, but 2027 is uncertain
Fuel duty has been frozen at 52.95p per litre since March 2022, following the temporary 5p cut.
That freeze will continue until the end of 2026, so the Budget will not bring a fuel-duty rise this year.
The big question is what happens next. Under current rules, fuel duty is due to rise to 55.95p per litre in January 2027, then to 57.95p in March.
Industry groups want the freeze extended, especially now that diesel prices are around £2 per litre. Accountancy firm BDO expects the January rise is likely to be scrapped, but nothing is confirmed yet.
Public EV charging could get cheaper
Charging at home attracts 5% VAT, compared with 20% for public charging.
A cut in public charging VAT, potentially to 10%, is being considered.
This could particularly benefit EV drivers who rely on public chargers, although the amount they save will depend on whether charging operators pass the VAT reduction on to customers.
More details expected on the pay-per-mile tax
The government has already confirmed that EVs and plug-in hybrids will face a new mileage-based tax from 1 April 2028, announced in last year’s Budget. This year, we could expect the Budget to explain how the system will work, rather than change the rates.
EVs will pay 3p per mile, while plug-in hybrids will pay 1.5p per mile, on top of the standard car tax. The charge will be based on MOT mileage readings, not GPS tracking.
Drivers will be looking for clarity on how mileage will be estimated for brand-new cars and how any difference between estimated and actual mileage will be settled.
Electric company cars will still get tax breaks
Tax on electric company cars is rising from 4% currently to 5% next year, then 7% and 9% by 2029.
That will gradually increase the tax bill for drivers with an EV through work, although electric cars remain considerably cheaper to tax than petrol and diesel company cars, which are typically taxed at 25-37%.
EV drivers in London will pay more
Electric cars are no longer exempt from London’s Congestion Charge.
The EV discount is currently 25%, having fallen from 100% at the start of 2026. It’s due to fall again to 12.5% from March 2030.
If you live in London, remember that you need to register in advance to receive the discount.
Car change? Carwow!
Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.
Want to see the latest car content first? Add Carwow as a preferred source here. Click here to follow us on Reddit, where you can keep up-to-date with all the latest news, reviews, advice guides and videos.