Budget a missed opportunity to support automotive retail sector – NFDA
The National Franchised Dealers Association (NFDA) views the 2026 Budget as a missed opportunity to adequately support the UK automotive retail sector amid rising operational pressures and the electric vehicle (EV) transition. Chief executive Sue Robinson highlighted that while measures like fuel duty cuts and reduced public EV charging costs offer some relief to motorists, broader policies fall short. The NFDA expressed deep concern over rising employment costs, driven by increases to Employer National Insurance and the National Minimum Wage, alongside restrictive business rates and an inflexible Growth and Skills Levy that it says hinders apprenticeship training. Regarding EVs, the NFDA criticized the proposed mileage-based Vehicle Excise Duty (eVED) system for creating complexity that could deter buyers, advocating instead for a fixed annual charge. To boost growth and EV adoption, the association continues to call for a single retail business rate multiplier, expanded rural charging infrastructure, and harmonized VAT rates between public and home charging.
“This Budget was an important opportunity for the Government to recognise the contribution of automotive retail to the UK economy. With rising employment costs, continued pressure on businesses and the transition to electric vehicles, our sector was looking for greater certainty and support, to invest and grow,” said Robinson.
Business Rates and Inheritance Tax
Business rates remain a significant concern for franchised dealers, with many businesses reassessing their property portfolios. NFDA would like there to be a single multiplier for retail, hospitality and leisure properties, regardless of property value, to reduce costs and encourage growth.
Robinson said: “Measures to ease business rates are wanted but are not enough. Family-owned businesses looking to protect jobs and plan for the future still need additional support.”
Employment costs and National Insurance
Rising employment costs remain a significant concern for franchised dealers. NFDA has called on the Government to avoid further increases to Employer National Insurance and the National Minimum Wage. Last year’s rises are already placing additional pressure on businesses and their ability to recruit and retain staff.
Robinson said: “Dealers are already struggling with rising employment costs, and these further increases of 3.9 per cent to the National Minimum Wage will only add to the pressure. With around 700,000 employees in the motor retail industry in the UK right now, businesses need support to retain staff and recruit, not additional financial burdens.”
Growth and Skills Levy
NFDA is calling for greater access to Growth and Skills Levy funding, with less bureaucracy and more flexibility in how it can be used. These changes would help dealerships invest in training and apprenticeships to address the ongoing skills shortage across the sector.
Robinson said: “This is another missed opportunity to address the skills shortage facing automotive retail. Dealers are ready to train the next generation, but they need an apprenticeship system that properly, with the appropriate funds to support this.”
Charging infrastructure and VAT harmonisation
Supporting the transition to electric vehicles remains a key priority for NFDA, who want to see further investment in public charging infrastructure, particularly in rural areas, alongside a yearly delivery mandate to help meet the Government’s target of 300,000 public chargers by 2030.
NFDA has also called for VAT rates on public and domestic charging to be harmonised, helping to reduce costs for drivers without access to home charging. In its recent ZEV Mandate consultation response, NFDA proposed a 50 per cent zero-emission car target and a 40 per cent zero-emission van target by 2030, reflecting current consumer demand and market conditions.
The Chancellor has announced measures to reduce the cost of charging at local, lower-powered public charge points, with drivers expected to save an average of £150 per year. While this is a positive step towards improving affordability, NFDA continues to call for greater investment in infrastructure and fairer VAT rates.
Robinson said: “Reducing public charging costs is a positive step, particularly for drivers without access to home charging. However, the difference in VAT rates remains an issue, and further investment is needed to make EV ownership more accessible.”
Vehicle Excise Duty (eVED)
NFDA has raised concerns about the proposed mileage-based electric Vehicle Excise Duty system, warning that a mileage-based system could discourage motorists from making the switch to electric vehicles.
Instead, NFDA has proposed a fixed annual charge as a simpler alternative to mileage-based taxation. This could reduce administrative costs and make the system easier to manage, while avoiding unnecessary complexity for motorists.
Robinson said: “The 2026 Budget was a missed opportunity. The proposed mileage-based EV tax risks making electric vehicle ownership less attractive, leading to it to be becoming non-workable. Adding further costs and complexity for motorists could undermine progress towards wider EV adoption.”
Fuel duty
The government has announced that its fuel duty decisions will leave petrol and diesel 15p per litre cheaper from April 2027 than under the previous government’s plans.
Robinson said: “Keeping fuel costs down is positive news for motorists and businesses alike. With many drivers and dealerships already facing significant financial pressures, measures that help reduce everyday motoring costs are important.”
NFDA looks to future
Robinson concluded: “Dealers are committed to investing in their businesses, supporting jobs and helping customers make the switch to electric vehicles. What we needed was a Budget that gave them the confidence to keep doing so, without adding further costs.
“NFDA will continue to lobby government on these vital issues and the number of missed opportunities for our sector today, to ensure the voice of automotive retailers is heard.”