Budget Bombshell: Fleets to bear the brunt of new EV tax?

In the forthcoming Autumn Budget to be announced on 26 November, Chancellor Rachel Reeves is expected to announce a new pay-per-mile tax on electric vehicles (EVs), charging drivers 3p for every mile from 2028.

The move aims to recoup revenue lost from fuel duty as drivers move away from petrol and diesel cars. The proposal has sparked debate over its potential impact on EV adoption and fairness for motorists.

The proposed levy could have a significant financial and operational impact on fleet operators, taxi companies, and couriers, by increasing running costs and potentially slowing down the transition to electric vehicles.

Cost is a major barrier to EV adoption, and adding a new tax could reduce the financial savings that are a key incentive for going electric.

The proposal has been met with criticism from the Society of Motor Manufacturers and Traders (SMMT) who have described it as “the wrong measure, at the wrong time”.

Fleet managers are now re-evaluating their strategies, with some considering shorter-term leasing arrangements to

navigate the financial uncertainty ahead.

The industry now awaits the details of the Budget, hoping for a plan that balances fiscal needs with the drive for more sustainable transport.