Autumn Budget 2025: What car owners can expect

Chancellor Rachel Reeves is getting ready to present the 2025 Budget in an address to the House of Commons on Wednesday 26 November.

The hotly-anticipated speech has been the subject of months of speculation, with motorists seemingly set for some pivotal announcements – if, that is, the rumours are to be believed.

At this stage, they are just that – rumours. But could the Chancellor be set to announce a hike in fuel duty, a review of the Motability scheme, a shake-up of public EV charging and VED road tax rates… or even, heaven forbid, pay-per-mile road charging for electric cars?

We shall find out more from 12:30pm as the Chancellor addresses the House of Commons. HonestJohn.co.uk will be watching the announcement live and bring you all the announcements – and all the reaction – as soon as it lands tomorrow.

In the meantime, here are some of the areas rumoured to be considered for the 2025 autumn Budget…

Fuel duty

Since 2012, fuel duty has been frozen at 52.95p per litre. And since 2022, a 5p a litre cut has been in place, after being imposed by former Chancellor Rishi Sunak to help with the cost of living in light of the Ukraine war.

Some commentators (but few actual motorists) believe it’s now time to review fuel duty. The Chancellor could immediately do this by scrapping the 5p a litre reduction – or go even further and announce a lifting of the longstanding fuel duty freeze.

Either would be a bold move, given how entrenched the current policies are. But if Rachel Reeves is set to hit electric cars, shouldn’t petrol and diesel drivers pay more too? Speaking of which…

EV pay-per-mile plans

A hotly-trailed policy surrounds pay-per-mile charges for EVs (and, even more dubiously, plug-in hybrids). As HonestJohn.co.uk has already explained, this simply couldn't immediately go live, as primary legislation is required for such an upheaval. 2028 is considered the earliest it could be implemented.

And there’s no guarantee the legislation would be passed, either – MPs, with one eye on their constituents, already have form here.  

But so prevalent are the rumours, there’s a strong chance the Chancellor will announce some sort of policy around pay-per-mile for electric cars – arguing that as they don’t pay fuel duty, this is simply an equalisation.

The automotive industry, already under severe pressure because of the Zero Emissions Vehicle Mandate, would undoubtedly be up in arms. There’s the very real risk already-fragile demand for EVs could be shattered entirely. But the Chancellor will argue that, with growing numbers of electric cars on our roads, the time is right to make them pay their way.

She may even have a carrot up her sleeve to placate the automotive industry…

Extending the Electric Car Grant

It seems likely the Electric Car Grant, which offers either £1,500 or £3,750 off the price of new electric cars, will be extended in the Budget. An extra £1.3bn cash injection will see it through to 2030, after 35,000 UK motorists have already taken advantage of it.

The Chancellor is also understood to be planning a £200m boost for the UK charge point infrastructure, taking the total EV-friendly cash injection up to £1.5bn. Will that be enough to placate the industry?

VED car tax

Since April 2025, electric cars have no longer been exempt from VED road tax. This is an irritating expense… but even more frustrating is the fact that, because so many cost more than £40,000, they’re liable for the Expensive Car Supplement (ECS) on top.

It means lots of electric cars are forced to pay an extra £425 a year in VED road tax between years two to six.

The government has already recognised the £40k barrier is too low for electric cars, which generally cost more than an equivalent petrol or diesel car. Could the Chancellor therefore raise the ECS to £50k or even £60k for electric cars in her 2025 Budget?