The highly anticipated Autumn 2025 Budget has been delivered. Plenty to take away, but let’s focus on what affects motorists and specifically, electric vehicle drivers to start with.
✅ Expensive Car Supplement threshold rises to £50,000 from £40,000
✅ Extra funding committed for public charging infrastructure
✅ Electric Car Grant extended
But…
The big take away has to be the introduction of a ‘tax per mile’ to all plug-in vehicles from 2028, with 3p for battery electric and 1.5p for plug-in hybrid. This is on top of the road tax that was introduced earlier this year.
As per the OBR, an EV driver on 8,500 miles per annum would incur an extra £255 as a result!
Perhaps what was once viewed as a cost-effective solution in many aspects to switch from petrol or diesel, may now not seem as lucrative? You would expect many motorists to be put off transitioning to EV on the back of this, even if data were to show them to remain cheaper to run.
Whilst the headline figures are clear, what remains uncertain is how this policy will be implemented, regulated and monitored including what this will mean for fleet operators, reimbursements and long term EV strategy.
At The Miles Consultancy, we understand that periods of policy transition can create real operational challenges. Our team are already analysing potential scenarios and insights to support our clients whatever the final framework will look like.
Either way, accurate records and mileage logging remains absolutely critical to ensure drivers are reimbursed equitably and paying the correct private amounts.
There is also a significant change relating to business travel, with 20% VAT on all private hire rides. These shifts mean that companies could face increased travel expenses, especially if travel programs aren’t actively managed.
Stuart ‘Mobility’ Donnelly, President Mobility at The Miles Consultancy, highlights:
With the latest UK budget changes ending VAT exemptions for private hire vehicles and introducing new per-mile charges on electric vehicles, the cost of business travel is set to rise significantly. Without a managed ground transportation program, businesses may face not only higher expenses but also a disincentive to choose greener travel options.
Now more than ever, it’s crucial for companies to have a streamlined, well-managed system like Mobility iQ to handle these changes efficiently and sustainably.
As the industry waits for clarity, TMC remains committed to helping organisations stay cost efficient, compliant and ready for change.
