While the 2026 Budget brought little in the way of surprises for the fleet industry, one thing the Chancellor did provide was some certainty for operators.  Some key takeaways for fleets:

• Long-term clarity at last for company car tax
• Higher mileage rates for grey fleet drivers
• Fuel duty freeze extended
• EV salary sacrifice remains untouched
• Some further information on 2028 eVED charges
• Mixed news on capital allowance
• Lower home charging costs continue to support EV adoption

Budget clarity at last for company car tax

What was arguably the most significant announcement for the fleet sector is the confirmation of Benefit-in-Kind (BIK) rates through to the 2030/31 tax year.

For electric vehicles, the increase remains relatively modest, rising from 9% to 10%, while plug-in hybrids and other vehicle categories will also see a 1% increase.

It’s true that some may have hoped for further incentives, but the reality is that predictability is often far more valuable than short-term tax advantages. Businesses can now model company car schemes, salary sacrifice programmes and replacement strategies with much greater confidence.

For Ogilvie Fleet, we feel that the BIK roadmap is very much welcome. It provides employers and drivers with the confidence to make informed decisions over the next several years, particularly when planning four-year vehicle agreements and EV salary sacrifice schemes.

Higher mileage rates for grey fleet drivers

The Budget also introduced a significant increase to Approved Mileage Allowance Payments (AMAPs). The tax-free reimbursement rate rises from 45p to 55p per mile for the first 10,000 business miles, with the rate beyond that threshold increasing from 25p to 35p per mile.

For employees regularly using their own vehicles for business travel, this represents a meaningful increase. A driver covering 10,000 business miles annually could receive an additional £1,000 tax-free compared with previous rates.

It might mean it’s time for businesses to review their grey fleet and business travel policies, as well as eligibility for company cars.

Fuel duty freeze extended

The planned fuel duty increase has once again been delayed, with the existing 5p cut retained until July 2027.

This will be welcomed by operators running diesel vans, mixed fleets and high-mileage vehicles, helping to ease operating costs in the short term.

However, while the measure provides immediate relief, it does little to alter the long-term direction of travel towards lower-emission vehicles and fleet electrification.

EV salary sacrifice remains untouched

Despite considerable pre-Budget speculation, there were no changes to EV salary sacrifice schemes. This means the tax and National Insurance advantages that have driven exceptional growth in the market remain in place.

Salary sacrifice continues to be one of the most effective ways for employees to access a new electric vehicle, while employers benefit through National Insurance savings and enhanced employee benefits packages.

Some further information on 2028 eVED charges

One of the few measures likely to increase operating costs for electric vehicle users is the introduction of a mileage-based Electric Vehicle Excise Duty (eVED) from April 2028. This was announced at the 2025 budget.

While this will add a new cost for EV drivers and fleet operators, it’s important to keep the change in perspective. A vehicle covering 10,000 miles annually would only incur a cost of around £300 per year.

This slightly changes the total cost of ownership calculation for electric vehicles, but it does not fundamentally weaken the business case for electrification. Fleet operators should simply factor the additional cost into future vehicle planning and procurement decisions.

Mixed budget news on capital allowances

For businesses that purchase rather than lease vehicles, the picture is more mixed, with Writing Down Allowances reducing to 12% from April 2027, meaning tax relief on purchased assets will be realised more slowly.

However, the Government has retained 100% First Year Allowances for new zero-emission cars and EV chargepoints until 2027. This means businesses investing in new electric vehicles can still benefit from substantial upfront tax relief.

Lower home charging costs continue to support EV adoption

The Budget also included measures designed to help households manage energy costs, including the extension of 0% VAT on domestic electricity until July 2027.

For fleets with employees charging electric vehicles at home, this helps reinforce one of the biggest advantages of EV ownership: lower running costs. As home charging remains considerably more cost-effective than fuelling traditional petrol and diesel vehicles, the economics of electrification continue to strengthen.

Ogilvie Fleet’s budget verdict

The biggest win isn’t lower taxation, it’s greater certainty. Businesses now have greater visibility over company car tax, continued confidence in salary sacrifice schemes and ongoing support for EV adoption. While there are some additional costs to consider in the years ahead, the overall framework remains supportive of fleet electrification.

For employers, drivers and fleet operators alike, that’s a welcome change.

Read more analysis from Fleet News here.