What the new Budget could mean for drivers: full list of potential changes

Chancellor John Healey will deliver the Autumn Budget on 28 October 2026, and it could have some important changes for drivers.

With more details expected on fuel duty, EV tax and EV charging, here's everything that might affect the cost of driving this Autumn.

Fuel duty set to increase by 5p per litre in 2027

Fuel duty has sat at 52.95p per litre since March 2022, following the temporary 5p discount. Under current plans, fuel duty will stay at this rate until the end of the year and increase in phases from 55.95p in January 2027, then to 57.95p in March.

However, some industry groups such as the AA have called on the government to keep their initial 5p discount, stating that if the cut were to disappear, it could cost drivers an additional £6.60 when filling up a typical family car.

More information on pay-per-mile tax for EVs

In last year's budget, the Government confirmed that EVs and plug-in hybrids will pay tax per mile from 1 April 2028. EVs will pay 3p per mile and plug-in hybrids will pay 1.5p per mile on top of the standard car tax.

When drivers tax their car, they give their current mileage and an estimate for the year ahead, then pay a balancing amount (or carry over unused miles) at the end of the year. MOT readings are used to check the figures. New cars are settled at their first MOT.

Some details are still to come, including refunds when you sell your car and an option for connected cars to report mileage automatically, so the Budget could give us more information.

Public EV charging VAT could be reduced

Some drivers and industry groups are pushing for the public charging VAT rate of 20% to be brought in line with the 5% VAT rate paid while charging at home.

Tom Preston, CEO at Hippo Leasing, explained that a 20% VAT rate for public charging effectively penalises motorists without a driveway. Preston said: "The people paying more are usually the ones who can least afford it, such as renters and flat-dwellers."

However, the Treasury reportedly blocked a cut earlier this year. The Government’s review of public charging costs, launched in June, also leaves VAT out of its scope.

The Autumn Budget will be delivered by Chancellor John Healey next Wednesday, on 28 October. This is the first Budget delivered by the Labour Government since Andy Burnham took over as UK Prime Minister in July this year.

Until then, nothing is confirmed for drivers, so keep an eye out for the announcement to see whether the fuel duty rises go ahead, how pay-per-mile will work in practice and whether public charging gets any cheaper.