Chancellor John Healey delivers his first Budget on Wednesday 28 October 2026, with the Office for Budget Responsibility publishing its forecast the same day. Speculation will fill the next nine days. For anyone running a company car, a fleet or a business that relies on vehicles, it helps to separate what is already settled in law from what is genuinely up for decision. A surprising amount is already fixed.
Already settled
| Measure | Position |
|---|---|
| Company car tax, zero-emission cars | 4% in 2026/27, 5% in 2027/28, 7% in 2028/29, 9% from 2029/30 |
| Company car tax, cars emitting 1-50g/km | Banded by electric range until April 2028, then a flat 18% in 2028/29 and 19% from 2029/30 |
| Maximum company car tax rate | 37% in 2026/27 and 2027/28, 38% in 2028/29, 39% from 2029/30 |
| Tax-free mileage rate, own car used for business | 55p per mile for the first 10,000 business miles, backdated to 6 April 2026 (previously 45p) |
| Expensive Car Supplement threshold, zero-emission cars | £50,000 from 1 April 2026, for cars registered from 1 April 2025 |
| 100% first-year allowance, new zero-emission cars | Extended by a year, to 2027 |
| VAT on home electricity, Great Britain | 0% from 1 October 2026 to 31 March 2027 |
The 55p mileage rate: easy to miss, worth knowing
The Taxation (Energy and Vehicles) Act 2026 raised the approved mileage allowance for business journeys in your own car from 45p to 55p per mile for the first 10,000 business miles in a tax year. It applies from the 2026/27 tax year, so it is backdated to 6 April 2026, and the same change applies to the simplified mileage rate for the self-employed. The government has said it will set out the rates beyond 2026/27 at this Budget.
For directors and employees who use their own car for business, that changes the comparison with a company car or a car allowance. It is worth rerunning the numbers rather than relying on a comparison made under the old rate.
Up for decision on 28 October
| Item | Where it stands |
|---|---|
| Fuel duty | 52.95p a litre until 31 December 2026. The law then returns rates to 55.95p from 1 January 2027 and 57.95p from 1 March 2027. The government has said it will confirm final rates at the Budget. |
| Pay-per-mile for electric cars (eVED) | Proposed from April 2028 at 3p a mile for electric cars and 1.5p for plug-in hybrids. Draft law published in July, but the Chancellor decides what goes into the Finance Bill. |
| Mileage rates beyond 2026/27 | Due to be set out at the Budget |
| VAT on home electricity after March 2027 | Any extension would be a Budget decision. Nothing announced. |
| Road tax rates for 2027/28 | Normally set at the Budget. Nothing announced so far. |
Outside the Budget itself, the government's review of the zero-emission vehicle sales targets closes to responses on 23 October. It has said the end goal, zero-emission driving by 2035, has not changed.
What is speculation
Motoring groups are lobbying hard on fuel duty. The RAC has argued there is a strong case for leaving it at its current level. That is a campaign position, not a policy signal, and until the Chancellor stands up, no one outside the Treasury knows. Treat any confident prediction with caution.
What it means for your next vehicle decision
- Company car tax is not waiting for the Budget. Rates are legislated to 2029/30, so you can compare electric, plug-in hybrid and petrol or diesel over a full agreement term now.
- Fuel duty matters most for high-mileage petrol and diesel drivers. Each 1p a litre is small per fill-up but adds up across a fleet. Watch the confirmed rates for January and March 2027.
- If you are choosing between electric and plug-in hybrid, the eVED decision is worth waiting for only if it would change your choice. The company car tax gap from April 2028, 7% against 18% for most plug-in hybrids, is usually the bigger number.
- Directors using their own car should rerun the comparison at 55p per mile.
We will publish a plain-English summary of what the Budget changes for drivers and businesses the day after the statement. If you want the numbers run for your own situation, call Intelligent Vehicle Finance on 01752 429950 or request a callback.
You can also read company car tax to 2030, the Expensive Car Supplement threshold for electric cars and our guide to company car tax, or browse business car leasing and business contract hire.
Sources: HM Treasury, Budget date announcement, 31 July 2026; Office for Budget Responsibility, October 2026 forecast timetable; Finance Act 2023 section 11; Finance Act 2025 sections 5 and 6; Finance Act 2026 sections 19, 30 and 97; Taxation (Energy and Vehicles) Act 2026 section 2; The Value Added Tax (Supplies of Domestic Electricity) Order 2026; SI 2026/555 (fuel duty relief extension); GOV.UK amended fuel duty rates 2026 to 2027; HMRC Electric Vehicle Excise Duty policy paper, 13 July 2026; Department for Transport zero-emission vehicle review, 14 August 2026; RAC, September 2026. This is general information, not tax advice.
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Reviewed by Stacey Smith, Brand Director, Intelligent Vehicle Finance. Last updated: October 2026.