Against a backdrop of weak economic growth, stretched public finances and falling fuel duty receipts, the Autumn Budget set out a revenue-raising package centred on reforms to motoring taxation.

For the UK’s leasing and mobility sector, the announcements represent a material shift in the long-term economics of electric vehicles (EVs) and the structure of company mobility schemes.

The introduction of Electric Vehicle Excise Duty (eVED) from April 2028, set at 3p per mile for battery-electric cars and 1.5p for plug-in hybrids, drew the strongest reaction across the leasing community. While long anticipated, businesses argue that the measure lands at a delicate moment for EV confidence.

Adam Hall, Director of Energy Services at Drax Electric Vehicles, said the timing “risks slowing progress at a critical stage,” with new running costs introduced “just as momentum builds.” Several industry voices echoed these concerns, noting that businesses and employees weighing EV options could face fresh uncertainty.

Leasing.com CEO Mike Fazal stressed that EVs maintain an operating-cost advantage even with the new charge, but recognised that the financial impact becomes more pronounced for fleets covering high annual mileages. “For organisations operating high-mileage electric fleets, the impact will understandably feel larger,” he said, though EVs remain competitive against equivalent petrol and diesel models on total running costs.

Christian Gorton, Marketing Director at CA Auto Finance, described eVED as “a real setback for current and prospective EV drivers,” warning that additional lifetime costs “could materially impact how quickly we’re able to meet the Government’s net-zero targets.”

Maria Bengtsson, EY UK&I Mobility Leader, agreed the measure introduces “a potential barrier to demand,” though she welcomed the Government’s £1.3 billion extension of the Electric Car Grant and further public charging investment.

Reforms to vehicle taxation also drew reaction. The rise in the Expensive Car Supplement (ECS) threshold to £50,000 was widely viewed as helpful, though several commentators said it fell short of market reality.

Caroline Sandall-Mansergh, Consultancy and Channel Development Manager at Alphabet (GB), said the uplift “doesn’t go far enough,” citing Alphabet data showing an average £56,633 P11D value across more than 1,000 EV models.

Robbie Watson, Senior Associate in the corporate tax team at Birketts LLP, said the Budget “introduces sweeping changes that will reshape fleet, leasing and employee car strategies,” including reduced allowances and future changes to Motability VAT treatment.

Rising fuel costs are also on the horizon. Fuel duty will be unfrozen for the first time since 2010, with stepped increases from September 2026. While many fleets have shifted away from petrol and diesel, the change still affects van operators and mixed-fuel portfolios.

Paul Holland, Managing Director for UK/ANZ Fleet at Corpay, said the Budget “makes life harder for fleets and small businesses,” warning that “nothing announced today makes life easier for fleets or small businesses.”

There was consensus that delaying reforms to Employee Car Ownership Schemes until 2031 avoided immediate disruption. James Tew, CEO at iVendi, described the postponement as “good news,” noting it would allow government and industry more time to develop long-term solutions.

"UK Autumn Budget: leasing sector warns of rising costs and slowing demand" was originally created and published by Leasing Life, a GlobalData owned brand.

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