I waded through the Budget 2026 document so you don’t have to. That’s all 118,000 words of the official HM Treasury text, plus the Chancellor’s speech and independent analysis, cross-referenced against each other. I drive a Volvo EX30. I’ve got solar panels. I went electric partly to do my bit for the environment and partly because the numbers made sense. So I read this one carefully.
You know the drill. We did the right thing, and once again the government has pulled the rug.
The government spent years telling us diesel was the greener choice. Tax breaks, incentives, all of it. Then they flipped. Clean Air Zones and surcharges followed, and resale values went through the floor. Diesel owners got the bill for a policy reversal they never saw coming. EV owners are watching the same playbook run again, just slower.
The Cost of Living Is Already Brutal
Let’s start with where we already are. Oil is up from around $70 a barrel to well over $100. Between February and October 2026, UK petrol prices rose by 33% and diesel by 41%. For a typical 55-litre family car, that’s about £24 more every time you fill up. Diesel is £32 more per tank.
The government extended the 5p fuel duty cut to July 2027. Fuel duty currently sits at 52.95p per litre. After July 2027 it rises to 57.95p, then goes up with inflation every year after that. Motor fuel was the single biggest driver of CPI hitting 3.5% in September 2026, according to the Budget document itself.
Petrol and diesel owners are already getting hammered. And EV owners, who bought in partly to escape that, are now being told their free ride is over too.
eVED: The New Tax on Every Mile You Drive
From 1 April 2028, electric and plug-in hybrid cars pay a new charge on top of existing road tax. First announced at Budget 2025, Budget 2026 confirms the rates:
- Battery electric and hydrogen cars: 3p per mile
- Plug-in hybrids: 1.5p per mile
- Both rise with inflation from 2029/30 onwards
What that actually costs you each year at 3p per mile:
- 5,000 miles: £150
- 8,000 miles: £240
- 10,000 miles: £300
- 12,000 miles: £360
- 15,000 miles: £450
Reporting your mileage means submitting an odometer reading and your estimated annual mileage online, with reconciliation done later. MOT records will cover most existing cars automatically. For newer connected cars, the government is building eVED Connect, an opt-in system that pulls mileage straight from your car’s telematics. Automatic refunds for overpayments are promised by 2030.
I get the argument. Fuel duty receipts fall as more people go electric, and that money has to come from somewhere. Roads cost money. Fair enough. But the people who went electric early, who paid a premium for it, who sometimes stretched their budgets to make the switch, are now being charged for the privilege. And the charge goes up every year.
Road Tax: You Are Already Paying It
If you registered your EV from April 2025, you’re already paying standard road tax. For cars registered from April 2026, the rates are:
- First year: £10
- Standard rate from year two: £200 a year
- Cars over £50,000 original list price: additional rate on top from year two
eVED sits on top of this from April 2028. Both charges run at the same time.
Electricity VAT: Kicked Down the Road Again
The 0% VAT rate on domestic electricity has been extended to July 2027, which saves around £50 off the Ofgem price cap in April 2027. After that it goes back to 5%.
Public charging stays at 20% VAT. No change, no plan to change it. If you don’t have off-street parking and rely on public chargers, you’re already paying four times the VAT rate of someone charging at home. The Budget doesn’t touch that disparity at all.
There’s £100 million over two years from spring 2027 aimed at bringing down costs on lower-powered residential public chargers, with an estimated saving of around £150 a year for regular users. There’s also a “tariff porting” taskforce looking at whether you could use your home electricity rate at some public chargepoints. That’s still at the talking stage.
Company Car Tax: Going Up
From 2030/31, Benefit in Kind rates rise by one percentage point across all bands, including zero-emission cars. The maximum rate goes to 40%. The government says it will keep a gap between electric and petrol BIK rates. For company car drivers who went electric to save on tax, the advantage is real but it’s shrinking on a published timetable.
Business Mileage: One Bit of Good News
If you run your own car for work, the approved mileage rate goes up to 55p per mile for the first 10,000 business miles from 6 April 2026, up from 45p. Beyond 10,000 miles it climbs to 35p from April 2027. For anyone driving an EV on business miles and claiming AMAP, that’s a proper increase and the first they’ve seen in years.
What They Did Not Mention
The plug-in grant, which takes up to £3,750 off the price of some new EVs, wasn’t mentioned at all. No confirmation it carries on, no announcement it’s being pulled. If you’re weighing up the switch, that silence isn’t helping.
The expensive car supplement threshold, which tacks on extra VED to cars over £50,000, was left at £50,000. Earlier budgets nudged it up from £40,000 precisely because EVs tend to cost more. No movement on that this time.
The Budget does include a £100 energy payment for households in council tax bands A to D this winter, plus a commitment to scrap standing charges from gas bills, with electricity to follow. Neither is EV-specific, but both matter if home charging is part of your monthly outgoings.
What It All Adds Up To
This is the timeline for a typical EV owner from here on:
- Now: £200 a year in road tax if you registered from April 2025
- July 2027: Home electricity VAT reverts to 5%
- April 2028: eVED at 3p per mile, on top of road tax. That’s £240 to £360 a year at typical mileage
- From 2029/30: eVED rises with inflation each year
- From 2030/31: Company car tax climbs another 1%
None of it is catastrophic on its own. But when you’re already stretched by energy bills, food costs, mortgage rates and everything else the last few years have thrown at us, being told the thing you bought to save money is going to cost you more each year is a hard sell. We were told to go electric. We went electric. Now the goalposts are moving again, on a schedule that anyone who bought a diesel in the 2000s would recognise immediately.
Home charging still saves you money compared to petrol. That hasn’t changed. But the gap is narrowing, and every Budget it gets a bit tighter.
Sources: HM Treasury Budget 2026 (PDF), Chancellor’s Budget 2026 speech, Rivervale Budget 2026 analysis.
