Making sense of the Autumn Budget 2025: Transport Sector
After weeks of speculation, the Chancellor delivered Labour’s second Autumn Budget in Parliament. Facing a £30 billion shortfall in public finances and constrained by the fiscal rules, the Chancellor set out tax, spending and borrowing plans for the year ahead.
Among these announcements are some important changes to the transport landscape, with the most notable measures focused on accelerating the shift to electric vehicles. Petrol and diesel drivers will benefit from a Fuel Duty freeze up to August 2026, but will see a planned increase confirmed thereon. As for EV drivers, funding for the Electric Car Grant, launched earlier this year to make new EVs more affordable, is being substantially increased and extended. The threshold for the Expensive Car Tax Supplement will also rise, easing purchasing costs for many higher value EVs in particular. Perhaps the biggest transport-focused announcement in this Budget is confirmation that a new Electric Vehicle Excise Duty (eVED), ‘pay per mile’ tax, is to be introduced on EVs from April 2028, in the form of a mileage charge for electric and plug-in hybrid cars.
Beyond EVs, the Budget includes wider transport commitments: from freezes on rail fares to major investments in roads, charging infrastructure, and UK automotive manufacturing. Above all, today’s transport announcements confirm EVs are high up on the Government agenda, with wider commitments focused on affordability and improving critical transport infrastructure.
Key Announcements
- Electric Car Grant extended to 2029–30 with extra £1.3 billion.
- New “eVED” pay-per-mile duty from 1 April 2028: 3p per mile for EVs and 1.5p per mile for plug-in hybrids, and a consultation incoming.
- Fuel duty frozen for five months, then gradually increased: 1p from September 2026, 2p from December 2026, and 2p from March 2027.
- EV charging: extra £100 million for home and workplace charge points, plus ten-year 100% rate relief for eligible charging points and EV-only forecourts.
- Expensive Car Supplement threshold will be raised from £40,000 to £50,000 from 1 April 2026.
- Manufacturing Drive35 Support: Funding to support UK automotive manufacturing will be extended with a further £1.5 billion to 2035.
- Frozen Rail Fares: All regulated rail fares in England will be frozen for 1 year from March 2026.
- Fuel Finder Scheme: From Spring 2026, UK consumers can use the DESNZ open data Fuel Finder scheme to compare prices.
- Road Maintenance: By 2029-30, the government will commit over £2bn annually for local authorities to repair, renew and fix potholes on their roads, which will be partly funded by the new eVED.
- Employee Car Ownership Schemes: changes to benefit-in-kind rules will be delayed to April 2030.
- Motability Scheme tax reliefs will be tightened so that top-up payments and insurance face new tax charges, with exemptions retained for specially adapted vehicles.
- Lower Thames Crossing: £900 million investment to complete works.
- Consultation launched on EV Charging and Planning Development Rights: proposing to reduce red tape around the installation of private charging points including cross-pavement charging solutions
If you would like to learn more about what the spending review means for you, please get in touch with us at:hello@tendoconsulting.co.uk
