NFDA Policy Summary: Autumn Budget 2026

This summary sets out the measures in Budget 2026 most relevant to franchised dealers,
drawn from the full Budget document (the “Red Book”) and the documents published
alongside it.

Key measures for dealers include:

• Fuel duty: the 5p cut extended to 1 July 2027
• £100 million to reduce costs at local, lower-powered public chargers
• A two-year real-terms freeze in business rates for retail, hospitality and leisure
  properties
• Business mileage rates permanently increased
• £100 million to expand mayoral apprenticeship support

The NFDA will continue to campaign for:

• VAT on public charging: bringing it in line with home charging, to support drivers
  without off-street parking
• eVED: a simpler system ahead of its April 2028 launch, and clarity on how
  mileage credit is handled when cars are sold
• Business rates: a single multiplier for retail, hospitality and leisure, and clarity on
  which showrooms qualify for the freeze
• Employment costs: restraint on dealer wage bills and employer costs, following
  the 3.9% minimum wage rise
• Inheritance tax: relief for family-owned dealer groups
• Growth and Skills Levy: easier access and a wider range of eligible training

The NFDA has put together a summary document including all the most relevant policy
updates for franchised dealers

Key Government Documents

• Budget 2026 (the “Red Book”)
• The Chancellor’s Budget statement (Hansard, 28 October 2026)
• Budget Resolutions, October 2026
• HMRC: Budget 2026 Overview of Tax Legislation and Rates
• HM Treasury: Budget 2026: Breathing space for today, hope for the future
• Cost of public electric vehicle charging review (Philip New, October 2026)
• Office for Budget Responsibility: Economic and Fiscal Outlooks
• The introduction of Electric Vehicle Excise Duty (eVED): consultation response, July 2026

Electric vehicles and charging

VAT on public EV charging

• The Government will legislate to confirm that electricity supplied through charge points
  accessible to the public (whether paid for or free) or to employees and contractors at their
  workplace is subject to 20% VAT. This applies from 1 November 2026, ahead of the Finance
  Bill. Plug-in hybrids are included, and charge points open only to residents of a particular
  residential building are excluded.
  o NFDA comment: Aligning VAT on public charging with the reduced rate on home
  charging remains a priority for the NFDA, as it would help drivers without off-street
  parking make the switch to electric. As tax was outside the scope of the
  Government’s review of public charging costs, we will continue to make this case
  directly to the Government.

Cost of public charging

• £100 million discount scheme: from Spring 2027, £100 million over two years will
  temporarily cut the price of charging at local, lower-powered public chargers, such as on street chargers. The Government expects this to save the average EV driver without home
  charging who charges on-street around £150 a year. It is an interim measure while a new
  taskforce explores the longer-term option of letting drivers use their home electricity tariff at
  these chargers. The Department for Transport has not yet set out how the scheme will work.
• Philip New’s independent review, published alongside the Budget, found that public charging
  prices have risen by 69% for lower-powered chargers and 94% for rapid chargers in real
  terms since 2021. Drivers using only rapid chargers now pay around 24p per mile, more than
  petrol at its September 2026 price of 22p.
• The Budget takes forward two of the review’s five recommendations. Reform of electricity
  network charges and levies, a certificate scheme for renewable electricity used to charge
  EVs, and grants for battery storage at charging sites are not addressed.
• The temporary 0% VAT rate on domestic electricity is extended to 1 July 2027.
• The Budget document does not mention the Electric Car Grant, the Expensive Car
  Supplement or the Employee Car Ownership Scheme.

Electric Vehicle Excise Duty (eVED)

• As previously announced, eVED starts in April 2028 at 3p per mile for fully electric cars and
  1.5p per mile for plug-in hybrids, rising with CPI inflation from 2029-30.
  National Franchised Dealers Association | 201 Great Portland Street | London W1W 5AB | Tel: 020 7307 3597
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• New in this Budget: a mileage estimation tool will be available at launch; an opt-in “eVED
  Connect” system will use vehicles’ in-built connectivity so mileage does not need to be
  reported manually; an automated refunds model will be developed by 2030, including for
  when a motorist overestimates their mileage or sells their car; and guidance for fleet
  operators will follow later this year.
  o NFDA comment: Under the Government’s July consultation response, until refunds
  are available, any prepaid mileage credit transfers with the vehicle when it is sold,
  and the Government expects its value to be reflected in the sale price. This is directly
  relevant to how dealers value used EVs and plug-in hybrids.

Motoring taxation

• Fuel duty: the 5p cut is extended for a further six months to 1 July 2027, and the planned RPI
  increase is deferred to the same date.
• Vehicle Excise Duty: rates for cars, vans and motorcycles rise in line with RPI from 1 April 2027.
• Company car tax: rates for 2030-31 will be 1 percentage point above 2029-30 rates, taking
  zero-emission cars from 9% to 10% and cars emitting 1 to 50g CO2/km from 19% to 20%, up
  to a maximum of 40%. The measure’s heading refers to “potential for ULEV SalSac reforms”
  (salary sacrifice for ultra-low emission vehicles), but no further detail is given.
• Payrolling benefits in kind: mandatory payrolling of company cars, vans, fuel and medical
  benefits will start on 6 April 2027, with remaining benefits from 6 April 2028, as announced in 2025. The Van Benefit Charge and the Car and Van Fuel Benefit Charges rise with CPI from 6 April 2027.
• Mileage rates: the temporary 55p per mile tax-free rate for the first 10,000 business miles, introduced in May, is made permanent for employees and the self-employed. The rate above 10,000 miles rises from 25p to 35p from 6 April 2027, as announced on 27 October.
• Commercial vehicles: most HGVs have had a £1 VED rate since July, on licences taken out up to 30 June 2027. The red diesel duty cut is extended to 1 July 2027.

Motability

• The Chancellor listed “reforming Motability” among the Government’s welfare changes. The
  Budget document lists existing reforms (tax breaks restricted to save over £1 billion over the
  next five years, and Motability Operations removing luxury vehicles from the scheme) and
  sets out no new Motability measures.

Business rates

• Beyond the extra relief for pubs, music venues and social clubs and the higher Small
  Business Rates Relief threshold, all other retail, hospitality and leisure (RHL) properties in
  England will have their rates frozen for two years so that no property in those sectors faces an
  above-inflation increase. Bill increases for qualifying RHL properties will be capped at CPI
  inflation in 2027-28 and 2028-29, so bills can still rise in line with inflation.
• The 1p Transitional Relief Supplement is extended for two years from April 2027. It is paid by
  properties whose bill increases would otherwise fall below the transitional caps.
• The £150 and £300 Valuation Tribunal fees for business rates appeals in England are
  abolished, and fees already paid on 2026 list appeals will be refunded.
  • NFDA comment: The Budget document does not define “qualifying RHL properties”
    or announce any change to the multipliers. We expect the 2027-28 cap to be based
    on September 2026 CPI inflation of 3.5%, and that properties with a rateable value of
    £500,000 or more, which pay the higher multiplier, may not be covered.

Employment and skills

• Minimum wage: from 1 April 2027 all rates rise by 3.9%. The National Living Wage rises to
  £13.21 an hour, the 18 to 20 rate to £11.27, and the rate for 16 to 17 year olds and eligible
  apprentices to £8.31.
• Apprenticeships: £100 million across 2027-28 and 2028-29 expands mayoral apprenticeship
  support from 7 to 14 Mayoral Strategic Authorities, particularly for SMEs (announced in
  September). The £2,000 hiring payment for new young apprentices at non-levy employers in
  England and the £3,000 Youth Jobs Grant are confirmed. The NFDA will continue to
  campaign for reform of the Growth and Skills Levy.
• Non-compete clauses: as announced in October, the Government will legislate, across the
  whole economy, so that non-compete clauses do not stop workers moving jobs. It will consult
  shortly on wider restrictive practices and set out its position in early 2027.

Tax for dealer groups and owners

• Headline rates: no increase to the headline rates of income tax, National Insurance
  contributions or VAT, and corporation tax remains capped at 25%. No changes to employer
  National Insurance or Business Property Relief are announced.
• Capital allowances: the main rate first-year allowance rises from 40% to 50% from 1
  January 2027, and the main rate writing-down allowance falls to 12% from April 2027.
• Property and savings income: income tax rates rise by a further 2 percentage points from 6
  April 2027, on top of the rise announced at Budget 2025, taking them to 24% (basic), 44%
  (higher) and 49% (additional). Rates on earnings and dividends are unchanged.
• Business Asset Disposal Relief: the lifetime limit falls from £1 million to £500,000 for
  disposals from 6 April 2027.
• Company distributions: reforms from April 2028 will tax distributions consistently while
  protecting capital treatment for families passing down their business. Draft legislation follows
  in 2027.
• Tax administration: VAT e-invoicing becomes mandatory from 1 April 2029, as announced
  at Budget 2025. Following earlier consultations, businesses must set up a direct debit for VAT
  and PAYE liabilities from April 2029, and new requirements to correct errors in tax returns
  apply from 1 April 2028. The Government is also consulting on simplifying corporate tax to
  support investment.

The wider economy

• Inflation rose to 3.5% in September, mostly due to motor fuel, and the OBR expects it to peak
  at 3.8% in early 2027 before falling to 2.1% in 2028.
• The OBR forecasts GDP growth of 1.2% in 2026 and 1.0% in 2027, with household
  consumption growth slowing to 0.6% in 2027.

Next steps
MPs will vote on the remaining Budget resolutions at the end of the Budget debate on Tuesday 3
November. Many of these tax measures will then be legislated for in Finance Bill 2026-27 and still
need Parliament’s approval, so detail may change. The NFDA will keep members updated as further
detail is published, including the Department for Transport’s next steps on public charging.