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Healey extends fuel-duty and electricity relief

Published 29 October 2026

Chancellor John Healey announced extensions to electricity VAT relief and the fuel-duty cut in the Autumn Budget, alongside higher tax-free mileage rates for people using their own vehicles for work. The measures were presented as support for households and businesses facing energy and motoring costs. Healey said the 5p-per-litre fuel-duty cut would continue through the winter and spring to July 2027. It had previously been due to end on December 31, 2026. His announcement also included another freeze on fuel duty, according to one account of the Budget measures. The extension keeps the existing reduction in place; it does not itself guarantee lower pump prices. For work-related driving, Healey said the 55p-per-mile rate for the first 10,000 business miles would become permanent. The rate for mileage above that threshold is due to rise from 25p to 35p per mile on April 6, 2027. He said the changes would support around three million employees and self-employed people who use their own vehicles for work. The rates concern tax-free mileage allowances and do not establish what any particular employer will reimburse. Healey also said the zero VAT rate on domestic electricity would...

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