Autumn Budget 2025 Predictions: what could it mean for drivers?
We look at potential motoring-related changes coming in the Autumn Budget 2025
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What to expect from the 2025 Autumn Budget
The Autumn Budget is set to be revealed on Wednesday 26 November 2025 and could bring changes that affect UK motorists.
Rumours suggest that Chancellor Rachel Reeves could announce moves such as:
Introducing pay-per-mile for EVs – how will it work?
Cuts to the Motability Scheme – will there be a change to tax breaks and eligible cars?
Reduced VAT for energy bills – can we expect cheaper EV charging at home?
Fuel duty increase - is the freeze coming to an end?
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What’s the Budget and when is it?
As the UK’s big yearly update on all things tax, public spending and borrowing, the Autumn Budget gives the public an idea on how the country’s finances will be handled.
Budget updates for motorists are some of the big ones that are likely to have an impact on our daily lives.
The Budget will be delivered on 26 November 2025 at around 12:30pm GMT.
Introducing pay-per-mile
Reports suggest that the Chancellor is making plans to introduce a ‘pay-per-mile' tax for electric vehicle (EV) drivers, which could cost 3p for every mile they drive. Hybrids are also likely to be included but at a lower rate.
A government spokesperson told the BBC they ‘want a fairer system for all drivers’ and the change could help offset falling tax revenue as more people switch from petrol/diesel to electric.
1.6 million EVs are on our roads, and the motor industry anticipates this could rise to six million by 2028.
The pay-per-mile scheme could start in 2028, after consultation, and may cost EV drivers around £250 per year on average (compared to the reported ~£600 petrol/diesel drivers spend on fuel duty each year).
How the data would be tracked is unclear, but it could involve ‘black box’ telematics (similar to some car insurance policies) or reporting when a car gets its annual MOT.
Cuts to the Motability Scheme
One of the potential changes in the Autumn Budget is cuts to the Motability Scheme. This scheme makes it possible for people who get qualifying benefits to use their allowance towards a vehicle suitable for their needs, including the running costs that come with it.
Possible changes include:
Removing tax breaks – Motability scheme users currently get tax breaks that make the vehicles VAT-exempt and remove insurance premium tax. This Budget could end these tax breaks.
Restricting access – there are predictions that we could see a slimming down of the cars eligible for Motability, removing some of the more premium picks.
0% VAT on energy bills
There have been predictions that the Chancellor might announce a 0% VAT rate on domestic energy bills.
This would mean the current 5% VAT rate would be removed completely, and the average household could save up to £86 a year.
How does this impact drivers?
EV charging at home would become cheaper without having any VAT to pay, encouraging further adoption of electric motoring.
Fuel duty increase
Fuel duty is a tax added onto the final price that we pay as consumers for fuels used for driving and heating.
Fuel duty has been frozen at 52.95p per litre of petrol or diesel since 2022, when a 5p cut was introduced.
Fuel duty increase – a fuel duty increase would mean filling your car’s tank becomes more expensive, but it’s likely to only be a small rise that will be phased in gently (if it happens at all).
Autumn Budget predictions explained
These are possible announcements affecting motorists in the upcoming Autumn Budget 2025 and should be taken with a pinch of salt until we hear from the Chancellor on 26 November.
Keep these areas in mind as topics that could impact your driving life if changes are announced, especially when it comes to big changes like the Motability Scheme.
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