Taxation (Energy and Vehicles) Bill: HL Bill 38 of 2026–27
The Taxation (Energy and Vehicles) Bill is a money bill that would implement three tax measures as part of the government’s package of support to tackle increased energy prices. The bill would increase the electricity generator levy, increase the rate of tax-free mileage allowance for employees, and provide a 12-month vehicle excise duty exemption for HGVs.
Approximate read time: 10 minutes
The bill is a short, government bill that would implement three tax measures in response to the increase in fuel prices resulting from the conflict in Iran. The bill was fast-tracked in the House of Commons, completing all its stages on 1 July 2026. The bill was introduced in the House of Lords on 2 July 2026. Its second reading and all remaining stages are scheduled to take place on 14 July 2026.
The bill would:
- increase the rate of the electricity generator levy (EGL) from 45% to 55%
- increase approved mileage allowance payments (AMAPs) for employees from 45p per mile to 55p
- introduce a 12-month exemption from vehicle excise duty (VED) for some heavy goods vehicles (HGVs)
The government has said the measures would support workers and businesses impacted by higher energy costs.
The bill has been designated as a money bill. This limits the extent to which the House of Lords can amend it, and it means the bill can become law with or without Lords approval.
There was broad cross-party support for the bill during its House of Commons stages. Opposition parties tabled amendments to require the government to publish reports or undertake reviews on the impact of the tax measures, but these amendments were not added to the bill.
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