By RAM Tracking on 3 Dec 2025
By Daniel Briggs, Marketing Director, RAM Tracking
The Autumn Budget introduced updates that will shape how fleets operate and plan for the future. Some will support growth and investment; others will call for a closer look at long-term costs and strategy.
The biggest change is the introduction of a pay per mile charge for electric vehicles from April 2028. There is also welcome news for businesses upgrading their commercial fleets, with further support for cleaner vehicles and smarter operations.
Fleets that stay ahead of these changes will be better placed to manage costs, meet compliance rules and protect productivity. Here is what you need to know.
Here's what matters for your fleet:
40% first-year allowance for leased commercial vehicles from January 2026
VED threshold increase for zero-emission vehicles (£40,000 to £50,000)
New pay-per-mile charge for EVs (3p) and PHEVs (1.5p) starting April 2028
PHEV BiK simplification confirmed (avoiding potential multi-million pound compliance costs)
No new support for the used EV market
These changes bring real opportunities for cost control and investment, alongside new risks to budget planning. Let's break down what this means for your operations.
After years of industry campaigning, the Government confirmed a 40% first-year allowance for "main rate" assets purchased for leasing from January 2026. This offers significantly more first-year tax relief on commercial vehicle purchases.
For decades, rental were excluded from this scheme, so this represents genuine progress for fleet operators.
However, some would argue this doesn't go far enough. Leased cars remain excluded, and the writing-down allowance for the main pool drops from 18% to 14%. This creates new cost pressures that could offset the first-year advantage for longer leases.
With the new Budget, the expensive car supplement threshold for zero-emission vehicles rises from £40,000 to £50,000. This adjustment reflects the reality of EV pricing and reduces the VED burden for many fleet operators and rental businesses.
If your fleet includes EVs in the £40,000-£50,000 range, you'll see immediate savings.
Salary sacrifice for electric vehicles remains a reliable way to cut costs for both employers and drivers. Benefit in Kind rates stay low and predictable, continuing to play a major role in helping fleets switch to electric without adding financial pressure.
This stability gives employers and leasing providers the clarity they need. With the bulk of EV registrations delivered through business channels, having no unexpected changes means forward planning remains on solid ground.
The confirmation that PHEV BiK rules will use a notional CO₂ value from January 2025 to April 2028 simplifies administration significantly. The proposed 'dual' scheme would have cost the sector eye-watering, multi-million-pound implementation values.
Common sense prevailed. Your admin teams can breathe easier.
From April 2028, electric vehicles face a pay-per-mile charge of 3p per mile. Plug-in hybrids pay 1.5p per mile.
Let's put this in real terms. A van covering 15,000 miles annually faces an additional £450 charge. For a fleet of 10 vans at similar mileage, that's £4,500 added to your annual operating costs.
The Government needs to address falling fuel duty revenues. That's understandable. But introducing a new tax on EVs during a critical transition period creates significant risks.
The Zero Emission Vehicle (ZEV) Mandate pushes manufacturers to increase EV sales. Meanwhile, eVED dampens demand by adding costs when businesses are already navigating higher upfront prices and charging infrastructure challenges. The result is a tug of war between incentives and costs.
Perhaps more concerning than the cost itself is how this will work operationally. The DVLA's infrastructure and lack of fleet-friendly services create legitimate concerns about implementation.
Fleet operators managing dozens or hundreds of vehicles face potential administrative nightmares. Introducing a new tax on EVs is difficult enough. Implementing it through systems not designed for fleet operations risks making operators yearn for the simplicity of fuel duty and their petrol vehicles.
For businesses using RAM Tracking, accurate mileage data becomes even more valuable. You'll need precise reporting to calculate liability and verify charges.
Another Budget passed. Another missed opportunity to address the used EV market.
Rampant electric vehicle depreciation costs businesses billions and erodes confidence amongst potential adopters. According to Toby Poston, chief executive of the British Vehicle Rental and Leasing Association, "Until we fix this 'leaky bucket' a big portion of the billions of pounds being invested in the industry will be wasted."
The Government must create supply and demand balance between new and used EV markets. Without intervention, depreciation will continue undermining the business case for EV adoption.
For fleet operators, this uncertainty complicates total cost of ownership calculations. How do you confidently plan vehicle lifecycles when residual values remain unpredictable?
The Budget's silence on this issue represents wilful neglect of one of the transition's biggest challenges.
Don't wait until 2028 to think about these changes. Take action now to protect your operations and maximise opportunities.
Consider whether accelerating planned EV purchases before April 2028 makes financial sense. Every mile driven before eVED kicks in avoids the per-mile charge.
Reassess replacement cycles for vehicles due in 2028 and beyond and factor the new charges into your decision-making.
Use your mileage data to project actual costs from 2028 onwards. Generic estimates won't cut it. Your specific fleet profile determines your liability.
A delivery fleet averaging 20,000 miles per vehicle faces different impacts than a service fleet averaging 8,000 miles. Run the numbers for your operation.
Factor eVED into total cost of ownership calculations for any vehicles you'll operate past April 2028. The maths changes significantly.
Automatic reporting gives you the accurate data needed for these projections. You can't plan effectively without knowing your actual vehicle usage patterns.
Mileage directly impacts costs from 2028. Unnecessary miles mean unnecessary charges.
Consider route optimisation to reduce journey distances without compromising service. Every mile saved is money saved.
Track private mileage separately if drivers use vehicles outside work hours. You'll need clear records for reporting and potentially for charging back personal usage costs.
RAM Tracking provides the visibility needed to identify inefficient routing, excessive idling, and unauthorised usage that all contribute to higher mileage totals.
The Autumn Budget brings both positives and negatives for fleet operators. Enhanced first-year allowances and protected salary sacrifice schemes are genuine benefits, helping businesses invest in cleaner fleets.
But the timing of eVED is a major concern. Adding a pay-per-mile charge during a crucial transition risks slowing EV adoption, and implementing it through DVLA systems will create extra administrative hassle.
The biggest gap in the Budget is the lack of support for the used EV market. Without action on severe depreciation, billions in investment could be lost.
Overall, fleet management is about to get more complicated. Operators will need stronger data, better planning, and tools that give clear insight into cost-driving metrics.
Those who succeed will be the ones who prepare early, understand the financial impacts, and optimise their operations proactively.
Fleet technology isn't just about tracking vehicles anymore. It's about managing the evolving costs and compliance requirements that determine your profitability.
Accurate mileage reporting, route optimisation, and driver behaviour monitoring become essential capabilities as per-mile charges arrive. The data you're collecting today shapes your liability tomorrow.
Want to understand your eVED impact before 2028 arrives? Our team can help you analyse your fleet's mileage patterns and identify opportunities to reduce unnecessary miles.
Contact us for your free no-obligation quote to see how we can help you stay compliant, cost-effective, and prepared for whatever changes come next.
Daniel Briggs is the Marketing Director at RAM Tracking, with almost 3 years of experience in the Field Service SaaS space and a deep understanding of what fleet managers need for both fleet tracking and job management.
His expertise spans fleet optimisation, driver behaviour management, and technology solutions that deliver measurable business results.
No. The enhanced allowance applies to "main rate" assets purchased for leasing from January 2026. Leased cars are excluded. Commercial vehicles like vans qualify. Check with your accountant for your specific circumstances.
No. The DVLA will manage eVED collection, which raises concerns about administrative burden for fleet operators. Details on the exact collection mechanism remain unclear. This is precisely why fleet operators are concerned about implementation.
After the first year, the writing-down allowance for the main pool drops to 14% (down from 18%). This means the benefit is front-loaded. For longer leases, this reduction could offset some of the first-year advantage.
If your existing zero-emission vehicles fall between £40,000 and £50,000, you'll benefit from lower VED costs immediately once the threshold change takes effect. Check your current fleet to identify which vehicles qualify.
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