The Autumn Budget 2026 extends the fuel duty cut and the VAT relief on household electricity until July 2027, but VAT on petrol, diesel and public EV charging was not reduced. Here is what that means for different types of drivers.
Fuel duty cut extended until July 2027
The Government has extended the 5p-per-litre fuel duty cut and the freeze on fuel duty until 1 July 2027. Fuel duty has been frozen since 2011, and the separate 5p cut was introduced in March 2022. It had been due to end on 31 December 2026. The extension keeps fuel duty at 52.95p per litre.
The extension comes as petrol and diesel prices remain high, with the RAC reporting that fuel prices have reached their highest levels since 2022 due to the conflict in the Middle East. The average price of diesel exceeded £2 per litre earlier this month.
The Chancellor also rejected calls to reduce VAT on petrol and diesel, so no further VAT relief on fuel was announced.
VAT on household electricity
The temporary 0% VAT rate on household electricity, which began on 1 October 2026, is extended until 1 July 2027. The Government estimates this will reduce the annual energy price cap by around £50. Drivers who charge their electric vehicles at home will continue to pay no VAT on qualifying domestic electricity during this period.
Public EV charging
Public charging remains subject to 20% VAT. Following a Tax Tribunal ruling earlier this year that EV charging counted as domestic electricity use, the Government is legislating to maintain the standard 20% VAT rate on electricity supplied at public and workplace chargers from 1 November 2026.
This means the ruling will not lead to a reduction in VAT for drivers using public charging points. The difference in VAT treatment between home and public charging remains a concern, particularly for drivers who cannot install a home charger.
This matters most for drivers who cannot install a home charger. The Government says around a third of UK households lack access to off-street parking, so many people have little choice but to rely on public charging, where electricity can cost far more.
The Budget did include some help:
· £100 million to support cheaper public charging: From spring 2027, funding will be used over two years to help bring down the cost of using smaller public chargers, particularly those on residential streets. The Government estimates that drivers who rely on this type of charging could save around £150 a year.
· Looking at home electricity tariffs: A new taskforce will investigate whether drivers could benefit from their cheaper home electricity rates when charging at certain public points. This is still being explored, so it is not yet a confirmed option for drivers.
It is not yet clear how the £100 million will be delivered. The wider gap between home and public charging costs remains an issue as EV ownership grows.
What it means for you
- Petrol and diesel drivers: you keep the 5p duty cut until July 2027, but pump prices still depend on the wholesale cost of fuel.
- EV drivers who charge at home: you benefit from the extended VAT relief until July 2027.
- EV drivers who rely on public charging: VAT stays at 20%, but you may see lower prices at local, lower-powered chargers from spring 2027.
Frequently Asked Questions
Not until 1 July 2027. The 5p cut is scheduled to end then, and duty is due to rise unless it is extended again.
On 1 July 2027, unless it is extended again.
No. It stays at 20%.
The £100 million fund to cut costs at local, lower-powered chargers starts in spring 2027, and a taskforce will look at letting drivers use home tariffs at those chargers.
