Fuel duty, EV charging and pay-per-mile tax: will the Autumn Budget 2026 mean higher costs for drivers?

The Autumn Budget 2026 takes place on Wednesday 28 October, with Chancellor John Healey expected to deliver his statement at around 12.30pm, following Prime Minister’s Questions.

But what could drivers see in the Budget? These are my predictions for what it could have in store for motorists, from fuel duty and public electric car charging costs to further details about the planned pay-per-mile tax for electric vehicles.

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Fuel duty: could the freeze be extended?

One of the key things to watch in the Autumn Budget is whether the government extends the fuel duty freeze. With many drivers already feeling the pinch at the pumps, an increase could make filling up even more expensive.

Fuel duty has been frozen at 52.95p per litre since March 2022, following a temporary 5p cut. The freeze is due to last until the end of 2026, but under current plans, fuel duty will rise to 55.95p per litre in January 2027 and 57.95p in March.

I think the government could face pressure to delay these increases, particularly as many people rely on their cars for everyday journeys and the average price of diesel in the UK reaching a record high of £2 per litre.

Accountancy firm BDO has also suggested scrapping the January rise, and the Budget could confirm whether this will go ahead.

Extending the freeze would be welcome news for motorists, helping to keep fuel costs down for longer.

Public electric car charging could become cheaper

I’ll also be watching for potential changes to the cost of public EV charging, which can be more expensive than charging at home.

Home electricity is subject to 5% VAT, while public charging generally attracts the standard 20% rate. This can leave drivers without a driveway paying more to charge their cars.

There have been calls to reduce VAT on public charging to 10%. I think this could help make electric cars more affordable, particularly for drivers who rely on public chargers.

However, any reduction would need to be passed on by charging providers for motorists to see the benefit.

More details on the pay-per-mile tax

The government plans to introduce a pay-per-mile tax for electric cars and plug-in hybrids from 1 April 2028. Under the proposals, electric car drivers will pay 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile, on top of standard vehicle tax.

I expect drivers will be looking for more clarity on how the scheme will work, including how mileage will be recorded and how payments will be made.

The proposed system is expected to use MOT mileage readings rather than GPS tracking, but questions remain about how it will work for newer cars that have not yet had their first MOT.

The Autumn Budget could be an opportunity for the government to explain the practical details and give drivers a clearer idea of how the tax could affect their motoring costs.

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