Summary of Reliefs Announced
- Fuel duty cut of 5p per litre extended until 31 December 2026 for petrol and diesel.(kpmg.com)
- Red diesel duty reduced from 10.18p to 6.48p per litre, in effect from 15 June 2026 to 31 December 2026.(kpmg.com)
- Mileage allowance rates increased for 2026/27: 55p per mile for first 10,000 miles; 25p per mile thereafter. Backdated to 6 April 2026.(kpmg.com)
- Temporary VAT cuts to children’s meals, tickets, and family attractions — effective 25 June to 1 September 2026.(kpmg.com)
Who benefits & how it works in practice
| Stakeholder | What you gain |
|---|---|
| Motorists | Lower pump prices due to frozen main fuel duty and extended cut. Even if you don’t own a business vehicle, general inflation on transport reduced. |
| Companies / Self-employed travellers | Higher mileage rates mean more deductible expenses if using your vehicle for work. For example, if doing 6,000 business miles/year, expect savings of around £120 based on new rates.(kpmg.com) |
| Agricultural sector & hauliers | Reduced red diesel duty and relief via VED holiday give substantial savings. |
| Leisure sector & consumers | VAT cuts on family outings reduce cost for tickets, meals during the summer period. |
How to claim & document these reliefs
- For business owners: ensure mileage claims are logged precisely (date, purpose, miles) to support deductions against increased rates.
- If using red diesel or rebated biodiesel, maintain records of usage and invoices; ensure correct duty rate is applied after 15 June.|
- At VAT registration, note the temporary reduced rates for applicable supplies during specified summer dates; then revert when rate returns to normal.|
Long-term considerations
- Expect fuel duty rates to incrementally increase starting September 2026, per Budget 2025 plans: 1p Sept, 2p Dec, 2p March 2027.(assets.publishing.service.gov.uk)
- Tariff suspensions currently under public consultation: list of 125 everyday products. Final outcome may affect cost base for importers and retailers.(gov.uk)
Relief policies like these are intended to provide immediate breathing space for households and small businesses. Knowing the dates, thresholds, and documentation needed can unlock real savings.