What the Autumn Budget Means for Drivers: Key Changes You Need to Know

The Autumn Budget brings important updates for drivers across the UK. This blog explains the changes and what they mean for anyone navigating the motoring world.

Daisy Cliff

Published: 26 November 2025

Updated: 26 November 2025

Read time: 3 minutes

The Autumn Budget 2025 has been released by Chancellor Rachel Reeves, and it brings some big news for drivers across the UK.

Here’s a quick and easy rundown of the headline changes you need to know about.

Pay-Per-Mile Tax for Electric Vehicles

One of the biggest announcements was the introduction of a new per-mile tax for electric vehicles, coming into effect from 2028. The government hasn’t yet revealed how mileage will be tracked, but we do know the proposed costs:

3p per mile for fully electric cars
5p per mile for plug-in hybrids

Fuel Duty Freeze Until 2026

Good news for petrol and diesel drivers, fuel duty will stay frozen until September 2026.

That means a little more stability at the pumps for now, even if future increases haven’t been ruled out.

Luxury Car Tax Threshold Increased

The Budget raised the threshold for the Luxury Car Tax for EV's (also known as the Expensive Car Supplement) from £40,000 to £50,000.

This means fewer cars will be caught by the higher annual road-tax charge. It especially benefits buyers of mid-range electric cars, many of which previously exceeded the previous £40k limit.

Electric Car Grant Extended Until 2030

To keep the momentum behind making the switch to EV, the government has confirmed that the Electric Car Grant has been extended to 2030.

This gives drivers more time to take advantage of financial support for people looking to switch to cleaner vehicles, particularly those buying lower-priced electric models.

Motability Scheme Changes

The Autumn Budget also introduced changes to the Motability Scheme, which directly affect premium manufacturers. Under the new measures, premium and luxury brands are being removed from the Motability vehicle list, meaning models from Audi and Mercedes-Benz will no longer be available through the scheme.

For those who wish to explore alternatives or review what remains available, our latest Motability offers can be viewed here.