2025 Autumn Budget

The Autumn budget was delivered recently and there were a few changes for the car industry, so we’ll run through them in this article to update you on all the major points covered.

Overall it was positive news for salary sacrifice car schemes, as they remain the most affordable route into an electric car. Long-term incentives were confirmed, an improvement to the expensive car supplement announced and the Benefit-in-Kind rates for EVs remaining unchanged.

Here are the key points:

Electric Car Grant Extended to 2029/30

The Budget confirmed further funding for the electric car grant, which has been extended to 2029/30. The scheme provides drivers with up to £3,750 off a new electric car, with more than 40 models currently eligible. However, only four models qualify for the full £3,750, while the remainder receive a £1,500 discount. All these models are available on our website, and most are currently in stock.

This continued support is positive news for those considering an electric car through salary sacrifice in the future and these discounts have already been applied to our systems.

VED Expensive Car Supplement improved

With effect from April 2026, the VED Expensive Car Supplement threshold for new zero-emission cars will rise from £40,000 to £50,000, a move which will make a lot of EVs more accessible to drivers. Once we have full details, our quoting system will be updated to reflect the change and relevant drivers contacted.

New eVED introduction

From April 2028, the Chancellor announced a new Electric Vehicle Excise Duty (eVED) that will be a pay-per-mile charging system introduced to help offset the reduction in fuel duty revenues as more drivers transition to EVs.

Under the proposed structure, electric cars will be charged at 3p per mile, while plug-in hybrids will pay 1.5p per mile. This means that based on an average mileage of 8,000 miles a year, it would equate to £20 gross cost a month for a BEV and £10 gross cost a month for a PHEV.

The Government have announced that they will run a consultation with key industry bodies to get feedback and advice on how this can work ready for 2028 and Lloyds Banking Group Transport businesses are currently working on our contribution. Currently, there is no change until April 2028.

We are pleased that Salary Sacrifice continues to remain the cheaper way to drive an electric vehicle, with over 2,500 stock vehicles available on our website, and we remain engaged with government and industry bodies to ensure this remains the same.