Recent Policy Changes (May 2026)
- UK government extended the 5p per litre fuel duty cut for petrol and diesel through 31 December 2026. Planned increases in September and December were cancelled. (gov.uk)
- From 15 June 2026 until 31 December 2026, the duty on red diesel will be cut from 10.18p to 6.48p per litre. (gov.uk)
- A road tax holiday for Hauliers: when renewing Heavy Goods Vehicle Vehicle Excise Duty, operators will pay just £1 for renewals over the next year—saving large sums per vehicle. (gov.uk)
- Mileage allowances were updated: Approved Mileage Allowance Payments (AMAPs), Mileage Allowance Relief, and self-employed mileage rates have increased and are backdated to 6 April 2026. Employers may need to re-run payrolls for April and May if reimbursements were taxed under earlier, lower rates. (gov.uk)
Who Benefits and How Pays Differently
| Stakeholder | Benefit | Practical Impact |
|---|---|---|
| Motorists & commuters | Lower fuel bills through year end; red diesel cost cut for those agricultural or freight using it; static road tax for HGV renewals. | Cost of travel and haulage reduces—helps businesses with fuel-intensive operations. |
| Hauliers / Freight firms | Huge savings in VED renewal; lower diesel costs. | Cash flow improved; lower operating expenses. |
| Self-employed / Businesses with travel | Higher mileage rates to reimburse or claim. | Helps offset wear and tear and fuel costs. Employers may need adjustments. |
Things to Watch Out For
- Backdate adjustments: Employers who reimbursed employees above old mileage rates and deducted tax/NIC might need to re-process payrolls for April and May 2026. (gov.uk)
- Red diesel usage: Many agricultural, plant hire and transport operations rely on red diesel. The effective rate change from 15 June 2026 through year end must be accounted.
- Fuel duty cut expiration: The reliefs currently run until 31 December 2026; from there, unless extended, full duty resumes or planned increases may be reintroduced.
Example Scenarios
- Farm business using red diesel**: Heavy use of red diesel will see immediate cost savings from mid-June through year end. When budgeting, factor in lower duty rates.
- Haulier renewing VED: Costs for vehicle renewals drop to £1—if vehicle qualifies. Significant cash savings especially for fleets of heavy trucks.
- Consultant travelling for work: Will be able to claim higher AMAPs/MAR rates for business travel incurred since April, possibly needing reworked payroll or self assessment documents.
Practical Advice & Next Steps
- Review expenses policies inside your business or your own records to ensure mileage reimbursements are compliant and optimised.
- Check eligibility: whether vehicles qualify for the road-tax holiday; whether your usage of red diesel qualifies for lower duty.
- Keep meticulous records of fuel purchases, travel dates, duties paid—particularly for accounting and potential claims.
- Plan for post-December 2026: if reliefs lapse, assess what your costs will be and adjust your budgets.
Takeaway: The government changes through mid-2026 offer meaningful relief to haulage, fuel users, and those traveling for business—but most beneficios end by end-2026. Timing, eligibility, and backdated claims are important.