1. Fuel duty freeze to continue until September 2026

In the recent Autumn Budget, the government announced that fuel duty freeze, which has been in place since January 2011 to prevent its rise with inflation, will be phased out from September 2026 onwards.
The current basic rate on diesel and petrol has been 52.95 pence per litre (ppl) as per the Office for Budget Responsibility which includes the 5ppl cut. From September 2026 onwards, the 5p cut will be reversed and fuel duty will increase annually in lines with inflation.

2. Benefit in Kind (BiK) to increase for all vehicles in 2026/27

Benefit in Kind (BiK) refers to the tax you pay when you buy a car through your company’s salary sacrifice scheme. BiK rates, like vehicle excise duty, are dependent upon your car’s CO2 emissions.
BiK rates, which had been stable since 2022, increased by 1% in April 2025, and now they are scheduled to increase again by another 1% in the 2026-27 financial year. From 6th April 2026 onwards, electric vehicles will pay 4% BiK as opposed to the current 3%. The BiK rate keeps increasing as the level of CO2 emitted by the car increases, all the way up to 37% levied on cars producing more that 154g/km CO2.

3. Electric car supplement increased to £50,000 for EVs from April 2026

Since April 2017, anyone buying a car worth more than £40,000 has been subject to an Expensive Car Supplement (ECS) also known as ‘luxury car tax’. The ECS is charged on top of the regular vehicle excise duty that all cars are subject to.
This however is set to change from 1st April 2026 onwards for all zero-emission cars, with the threshold increasing from £40,000 to £50,000. This comes as a welcome change for all those considering an electric car as it’ll take about 51% of all new electric cars out of the ECS tax, compared to the current 37% as shown by our data. The ECS threshold will stay the same for all other cars that aren’t fully electric.

4. Luxury cars removed and tax relief cut from the Motability scheme

Luxury cars are no longer available on the Motability scheme since the changes were announced on 25th November 2025. This includes cars from manufacturers like BMW, Audi and Mercedes, as well as any coupes and convertibles. These measures have been introduced to increase the number of British-built vehicles bought through the Motability scheme.
Plus, from July 2026 onwards, the government will levy a 20% VAT on vehicles that require an Advance Payment and replace the insurance premium tax with a standard rate of 12% applied to insurance policies for most new vehicle leases in this scheme. For Wheelchair Accessible Vehicles on the Motability scheme, Advance Payments will remain zero-rated for VAT and exempt from Insurance Premium Tax (IPT).

5. Congestion charges to increase and exemption for electric vehicles ending

Starting 2026, congestion charge will be increased from £15 to £18/day if paid on or before the day of travel, and from £17.50 to £21/day if paid within 3 days after travel.
The existing 100% Cleaner Vehicle Discount will also end on 25 December 2025. Instead, electric car drivers can get a 25% discount and electric van, HGV, and quadricycle drivers can get a 50% discount on the daily charge if they’re registered on Auto Pay. This would put the daily charge to £13.50 for electric cars, and £9 for electric vans, HGVs, and quadricycles.

6. All new cars and vans to meet Euro 7 emission standards from 2026

Emission standards help keep the emissions produced by vehicles in check, to help improve the air quality. Euro 6 is the latest emission standard rating introduced on 1 September 2015.
Euro 7 was adopted by the EU in April 2024 to help further reduce pollution emitted by vehicles in Europe, and is set to be implemented from 29th November 2026 onwards.

7. Learner drivers to have more control over driving test bookings from spring 2026

The government has announced new measures to improve learner drivers’ journey to getting a driving license from spring 2026 onwards.
The new rules will prevent third-party companies and online bots from buying and re-selling test slots to reduce the number of driving tests being re-sold at extortionate prices. Driving instructors will also be banned from booking driving tests for their pupils, and limits will be placed on the number of times a driver can move or swap a test. This will help reduce the waiting list for driving tests and give more power to the learner drivers to keep their personal data safe.

8. Driving theory tests to include new CPR questions from 2026

The DVSA has revised the first aid content in the driving theory test to equip more learner drivers with vital life-saving skills.
The driving theory test, which learner drivers must pass before they can book their practical driving test, will include enhanced first aid questions around cardiopulmonary resuscitation (CPR) and automated external defibrillators (AEDs) from early 2026 onwards. The DVSA hopes that with this move, more people know how to respond in emergencies to help increase the UK’s low cardiac arrest survival rates. The changes won’t affect the cost, test time, or the difficulty level of the driving test. The DVSA has already updated its official learning material to include this new content, so learner drivers will have time to familiarize themselves before the changes ahead of 2026.

9. Electric cars and plug-in hybrids to pay per mile from 2028 onwards

The government is introducing a new electric Vehicle Excise Duty (eVED) that will charge drivers based on how many miles they drove from April 2028 onwards.
With eVED, electric cars will have to pay 3p per mile driven and plug-in hybrids will pay 1.5p per mile, rising annually in line with inflation. eVED is set at approximately half of the fuel duty paid by petrol car drivers and will be levied on top of the standard VED that currently stands at £195/year. The miles driven will be checked annually, typically during the MOT test, and the payment system will be integrated into the existing VED system.

10. New Road Safety Strategy may introduce mandatory eye tests, lower drink-driving limit and stricter seatbelt laws

In August 2025, the government announced their new Road Safety Strategy which is due to be published soon. While we don’t know the full extent of the proposed changes, some of the anticipated changes include:
• Mandatory eye-tests for over 70-year-olds – Currently, over 70s must renew their driving license every three years. The system also relies of individuals reporting their own medical conditions. If these changes go ahead, eye-test could become a mandatory part of the renewal process. • Reducing the drink-drive limit – The current limit of 80mg of alcohol per 100ml of blood may be reduced to 50mg alcohol per 100ml of blood to align with the stricter limit followed in Scotland. • Stricter seatbelt laws – Currently, if you’re caught not wearing a seat belt, you can be fined up to £500. With the changes, you would also receive three penalty points on your licence for not wearing your seatbelt. We’re yet to hear what the exact changes are being proposed by the government, but we could soon see some of these rules in places in 2026.

11. Self-driving cars could be in the UK by 2026

We could see self-driving cars arrive by 2026 after the Automated Vehicles (AV) Act was passed in May 2024.
The AV Act requires all self-driving cars to undergo robust safety testing. Cars will need to achieve at least the same level of safety and competence as human drivers and meet all safety checks before they can be allowed on the roads. Using this technology, the government hopes to reduce road collisions and fatalities, boost the economy and deliver new jobs, improve the quality of transport in the UK, help deliver essential goods, and increase connectivity. Interested in hearing more about what’s happening in the motoring world? Read our weekly news bites to get all the headlines in one place.