The short answer
Fuel duty stays where it is. The Budget 2026 document extends the 5p cut and the freeze to 1 July 2027, cancels the plan to add 5p back from January 2027 and defers the inflation-linked rise to the same date. For people who use their own car for work, the 55p a mile rate for the first 10,000 business miles becomes permanent and the rate above 10,000 miles rises from 25p to 35p from 6 April 2027. Car tax rates for 2026/27 were not touched. And the mileage charge for electric and plug-in hybrid cars was confirmed for 1 April 2028.
Everything below is from GOV.UK: the Budget document, the speech and the HMRC policy papers published with them.
What changed, and from when
| Measure | Change | From when |
|---|---|---|
| Fuel duty | 5p cut and freeze extended; January rise cancelled; inflation rise deferred | Runs to 1 July 2027 |
| Mileage rate, first 10,000 business miles | 55p a mile made permanent | In force now |
| Mileage rate above 10,000 miles | Rises from 25p to 35p | 6 April 2027 |
| Lorry road tax | Vehicle excise duty of £1 for most lorries | 1 July 2026 to 1 July 2027 |
| VAT on home electricity | 0% rate extended by three months | Until July 2027 |
| Public and workplace EV charging | No longer treated as domestic use for VAT | 1 November 2026 |
| Electric and plug-in hybrid cars | Per-mile charge: 3p electric, 1.5p plug-in hybrid | 1 April 2028 |
The document also extends the 3.7p cut to red diesel to 1 July 2027 and commits £100 million over two years to reducing the cost of local, lower-powered public chargers.
Fuel duty: what the rate is and what the extension means
The duty on unleaded petrol and on diesel is 52.95p a litre and has been since 23 March 2022, according to the HMRC rates page. When read on 29 October 2026 that page still showed its 12 August update, so the Budget's new end date was not yet printed there; the Budget document is the source for it. The document says fuel duty is as low as at any point in over 16 years.
What the extension changes is the calendar. Until this Budget, the 5p was due to go back on from January 2027 and the usual inflation-linked rise was pencilled in. Both now wait until 1 July 2027. Nothing changes at the pump as a result of this Budget; what it removes is a rise that would otherwise have arrived in the new year. What happens after July 2027 is not decided in these documents.
Mileage rates if you drive your own car for work
The tax-free rate an employer can pay for business miles in your own car or van went up to 55p for the first 10,000 miles earlier in 2026 as a temporary measure. The Budget makes that permanent. The rate for miles above 10,000 in a tax year rises from 25p to 35p from 6 April 2027. If your employer pays less than these rates you can claim the difference against tax; if it pays more, the excess is taxable. Our business mileage guide walks through the claim with the current GOV.UK figures.
Car tax: what did not change
The Budget documents say nothing about the vehicle excise duty rates for ordinary cars, so the figures on the GOV.UK rate tables stand for 2026/27: a standard rate of £200 a year for cars registered since April 2017, and an additional £440 a year for five years on cars with a list price over £40,000, or over £50,000 if electric. Rates are normally set each April, so the next point at which car tax could move is the start of the 2027/28 year.
The one car tax change is for the future. The HMRC policy paper on electric vehicle excise duty, updated on Budget day, confirms a per-mile charge from 1 April 2028: 3p a mile for battery electric and hydrogen cars, 1.5p for plug-in hybrids, paid through the existing vehicle tax system on an estimated mileage and reconciled against the odometer reading each year. The paper notes that mileage is already collected at every MOT, so the MOT history will be the record most drivers lean on.
What to do now
- Nothing at the pump. No duty change takes effect this week; the Budget removed a rise rather than adding one.
- Keep a mileage log if you drive for work. The 55p rate is now permanent and the higher rate rises in April 2027; a log is what a claim rests on.
- If you charge in public, expect the VAT treatment to change from 1 November 2026. The HMRC paper says public and workplace charging is no longer treated as domestic use.
- If you own or are buying an electric or plug-in hybrid car, read the eVED paper. From April 2028 what you pay will depend on miles driven, and the MOT history already shows the mileage record the charge will use.
- Read the source. The GOV.UK Budget 2026 page links every document; the figures above are quoted from them, not from coverage.
What this does not mean
This article summarises GOV.UK documents as they read on 29 October 2026. It is general information, not tax advice, and it does not predict what happens after 1 July 2027 or how pump prices will move. The HMRC rates pages will be updated to reflect the Budget; where a figure on an official page differs from the summary here, the official page wins.
Frequently asked questions
No, and it did not raise it. The 5p cut and the freeze that were due to end are extended to 1 July 2027, the January 2027 rise is cancelled and the inflation-linked rise is deferred to the same date. Duty on petrol and diesel stays at 52.95p a litre.
The 55p a mile rate for the first 10,000 business miles in a tax year, introduced earlier in 2026, is now permanent. The rate above 10,000 miles rises from 25p to 35p from 6 April 2027. Both are from the Budget 2026 document and speech on GOV.UK.
The Budget documents make no change to vehicle excise duty for cars. The 2026/27 rates on GOV.UK stand: £200 a year standard rate for cars registered since April 2017, plus £440 a year for five years on cars listed over £40,000, or over £50,000 if electric.
From 1 April 2028, according to the HMRC policy paper updated on 28 October 2026: 3p a mile for battery electric and hydrogen cars and 1.5p a mile for plug-in hybrids, with the rate rising with inflation from 2029 to 2030.
Sources and method
This article contains no MOT statistics. Every figure and date is quoted from the GOV.UK documents listed under Sources as they read on 29 October 2026, the day after the Budget. The MOT reliance notice below applies to the MOT history this article refers to.
- GOV.UK: Budget 2026 document (HTML)
- GOV.UK: Budget 2026 speech
- GOV.UK: Excise duty, hydrocarbon oils rates
- GOV.UK: Vehicle tax rate tables
- GOV.UK: Electric Vehicle Excise Duty (eVED) policy paper
- GOV.UK: VAT on public EV charging
About these figures. GOV.UK content reproduced in summary under the Open Government Licence v3.0. SortedCars is not HM Treasury, HMRC or the DVLA; the links above go to the official pages. Where MOT statistics appear on this site they are computed from the DVSA anonymised MOT results dataset. No figure is shown for any group with fewer than 500 tests. Test class 4 only, first tests only; retests are excluded. Pass rates describe fleets, not individual machines: they reflect how cars were driven, maintained and used as well as how they were built, and beyond recorded mileage none of that is in the data. A well-kept example of a model with a weak average can still pass; a neglected example of a strong one can still fail. Alias spellings of a make are counted under one make name and all trims of a model under one model name, using SortedCars' grouping tables.
This article is general information drawn from published test records. It is not professional, mechanical or legal advice, and an MOT pass or a clean MOT history does not guarantee that a car is roadworthy today. If you are unsure about a car, have it inspected by a qualified mechanic. You can check any vehicle's MOT history free on the official GOV.UK MOT history service.
Check a car's MOT history free
Enter a registration to see its DVLA record and full MOT history, free, no sign-in.