A six point checklist has been issued by the Association of Fleet Professionals (AFP) in response to the budget, the first from Andy Burnham’s government and Chancellor John Healey.
It begins with a recommendation to examine the newly extended benefit in kind (BIK) tables, which now run to 2030 to 2031, and their impact across fleet operations, especially the increased viability of salary sacrifice schemes.
Points two and three are to update 2027 to 2028 financial forecasts to reflect fuel duty and heavy goods vehicle (HGV) Vehicle Excise Duty (VED) extensions, and to review grey fleet policy in light of higher Approved Mileage Allowance Payment (AMAP), including the possibility of managed fleet alternatives.
Fleets are then advised to refresh their vehicle replacement strategy to align with Euro 7 timelines and manufacturer supply constraints, and to prepare for electric Vehicle Excise Duty (eVED) through mileage capture, telematics integration and driver communication.
Finally, the AFP recommends assessing the total cost of ownership impacts of plug-in hybrid electric vehicles (PHEVs) versus battery electric vehicles (BEVs) under Euro 7 emissions regulations.
Dale Eynon, AFP government affairs and policy lead, said: ‘This was a mixed budget for fleets. The certainty offered by the extension to the BIK tables is very much to be welcomed, as is the fact there is only a one percentage point increase to 10% for the 2030-31 tax year.
‘Our feeling is that low taxation still plays a key part in enticing drivers into EVs and this remains an attractive rate.
‘We are also pleased to see plans are in place to introduce lower cost, lower power charging to make EV operation more affordable, although we are awaiting more details about exactly how this will work.’
Beyond this point, Dale said, the good news was limited, with only short term relief in areas such as the fuel duty freeze, despite the fact that many AFP members faced rising costs.
‘Heavy fleets will similarly benefit from extended duty and VED relief, which offers some breathing space but elsewhere, the picture is less encouraging, with little to ease the wider economic pressures that vehicle operators are facing and some potential unintended effects.
‘For example, increased grey fleet mileage rates could drive more employees to use older, less environmentally friendly cars, something most fleets want to avoid. This situation could strengthen the business case for fleet consolidation and wider EV adoption.’
Regulatory certainty was provided through confirmation alongside the budget of UK adoption of Euro 7 standards, which should help forward ordering and replacement cycles. However, this would weaken future PHEV viability, given expected CO₂ uplifts and eVED costs.
Dale said, ‘The budget document shows no changes to the latest VED proposals, which is disappointing given the AFP has raised several key issues. We hope to see more flexibility emerge but, in the meantime, vehicle operators should prepare. Mileage reporting systems will become increasingly important while telematics capability and odometer verification processes should be examined before the scheme’s 2028 arrival.’
AFP Budget 2026 checklist
1. Examine the implications of the new 2030 to 2031 benefit in kind tables, looking at the impact across fleet operations, especially the increased viability of salary sacrifice schemes.
2. Update 2027 to 2028 financial forecasts to reflect fuel duty and HGV VED extensions.
3. Review grey fleet policy in light of higher AMAP rates and consider managed fleet alternatives.
4. Refresh vehicle replacement strategy to align with Euro 7 timelines and manufacturer supply constraints.
5. Begin eVED readiness planning (mileage capture, telematics integration, driver communication).
6. Assess total cost of ownership impacts for PHEVs vs BEVs under Euro 7 and future taxation.