Chancellor Rachel Reeves unveiled Labour’s first budget in 14 years last week, with impactful changes for motorists and commercial vehicle owners.

We’ve broken down the most important updates on fuel duty, electric vehicle incentives, and tax treatments that affect private drivers, fleet owners and commercial vehicle owners. Read more below to see how these changes could impact you.

Fuel Duty Freeze

The Chancellor announced a fuel duty freeze extension for another year, amid rising costs. This includes the continuation of the 5p reduction, supporting families and businesses facing fuel price increases. For individual motorists, this could mean savings of around £59 for 2025-26. For fleet owners and commercial drivers, the fuel duty freeze helps stabilise operating costs, particularly important as other expenses continue to rise.

Real-time fuel price tracking with “Fuel Finder”

In a move towards transparent fuel pricing, Labour is introducing Fuel Finder, a new system set to launch by the end of 2025. This tool will require petrol stations across the UK to report their prices and fuel availability within 30 minutes of any change, creating more competition and potentially lowering prices by 1-6p per litre. Fleet operators and individual drivers can use this tool to make more informed choices and access competitive fuel rates in real-time.

Electric Vehicle (EV) Support with updated Vehicle Excise Duty Rates

Chancellor Reeves’ Autumn budget revises Vehicle Excise Duty rates starting in April 2025, especially for electric and hybrid vehicles. Zero-emission vehicles will maintain a low first-year VED rate of £10 until 2030, a financially better option for business and personal drivers. However, conventional vehicles will see higher VED rates, with an intentional move to encourage more electric vehicle adoption across the UK. This is a strategic benefit for commercial fleet operators moving towards low-emission vehicles.

Vehicle Excise Duty for Cars

From April 1, 2025, the government is revising Vehicle Excise Duty (VED) first year rates for new cars, aimed at encouraging the switch to zero-emission and electric vehicles. By widening the differences between zero-emissions, hybrid and internal combustion engine (ICE) vehicles, these changes create stronger financial incentives to choose cleaner cars.

What you can expect:

• Zero-emission vehicles: Will continue to benefit from the lowest first-year VED rate at £10, held through to 2029/30.
• Low-emission cars (1-50 g/km of CO2, including hybrids): The first-year rate will rise to £110 for 2025/26
• Cars emitting 51-75 g/km of CO2 (also including hybrids): This group will see first-year rates increase to £130 for 2025/26.
• All other vehicles emitting 76 g/km of CO2 and above: Rates will double from the current levels for 2025/26.

In addition to the above, standard VED rates for cars, vans and motorcycles (excluding the first-year rate) will be adjusted in line with the Retail Price Index starting April 6, 2025.

This is in line with the government’s broader goals to reduce emissions and increase the appeal of zero-emission and electric vehicles, helping both individual motorists and fleet owners make environmentally conscious choices.

Benefit-in-Kind Rates

Labour has set rates for Company Car Tax for 2028/29 and 2029/30 and have said that they will continue to strongly incentivise the take-up of electric vehicles. The rates for EVs will rise to 7% in 2028/29 and 9% in 2029/30. Rates for hybrid vehicles will be increased to align closely with rates for internal combustion engine (ICE) vehicles. There will be a much larger hike for low-emission PHEVs from 5% to 18% between 2027/28 and 2028/29. The government also confirmed plans to mandate the reporting of Benefit-in-Kind via payroll software from April 2026. This will apply to income tax and Class 1A National insurance contributions (NICs)

Van benefit and fuel benefit charges

For businesses offering vans as employee perks, there will be an increase in Van Benefit Charge and van fuel benefit charges starting April 2025. Companies will see a slight rise in costs in line with inflation if they provide these vehicles as part of their employee benefits. Fleet managers should assess how these changes may affect their budget forecasts and explore adjustments in their fleet policies if needed.

New tax classification for Double Cab PickUps

A significant tax update in this budget impacts double cab pickups. Starting April 2025, pickups with a payload of one tonne or more will be classified as “cars” for tax purposes, affecting capital allowances, benefit-in-kind, and deductions for business profits. Some good news though, those purchasing or leasing a DCPU before April 2025, transitional arrangements allow them to keep the previous tax benefits until April 2029 or until the vehicle is disposed or returned.

The reclassification means DCPUs previously taxed as commercial vehicles, will now fall under the car tax structure.

Avoid the tax changes and check out our deals on a VW Amarok or Ford Ranger.

Tax incentives for Electric vehicle fleets and charging infrastructure

Labour is also extending the 100% first-year allowance for zero-emission vehicles and EV charging infrastructure until 2026. This supports businesses transitioning to zero-emission fleets by offering immediate tax deductions on qualifying EV purchases and charging setups. Companies aiming for sustainability can leverage this incentive to reduce costs while investing in green infrastructure.

Final thoughts on Labour’s Autumn Budget

Labour’s Autumn budget 2024 delivers targeted measures to support UK motorists, fleet managers, and commercial vehicle owners. From the fuel duty freeze to enhanced incentives for electric vehicles and the reclassification of double cab pickups, these changes directly impact both individual drivers and businesses managing fleets. Staying informed on these updates will be crucial to maximising savings and adapting fleet strategies effectively.

Managing your fleet

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