Electric Vehicle Drivers Face New 3p Per Mile Tax Starting 2028
Government introduces eVED system to recoup lost fuel duty revenue, impacting EV owners and fleet operators.
Image: Matt Weston / AI
Sarah Connor
Electric vehicle drivers will incur a new 3p per mile charge starting in April 2028, a measure designed to offset declining revenue from traditional petrol and diesel fuel duties.
The new eVED system implements an upfront charge, calculated based on estimated annual mileage, offering drivers options for monthly payment installments.
Annual reconciliation against actual mileage will occur, verified through MOT readings or vehicle registration anniversaries.
Vehicles under three years old will not require these additional mileage checks, streamlining the process for newer models.
Shadow Chancellor Rachel Reeves confirmed cars manufactured before 2025 will undergo annual odometer checks under this new pay-per-mile car tax system.
Cars manufactured before 2025 will undergo annual odometer checks under this new pay-per-mile car tax system.
The Treasury supports investigations into the use of on-board telematics for real-time mileage data, though this technology does not currently form part of the official policy.
The Treasury will begin developing options for drivers of cars equipped with data connections, allowing them to provide mileage information directly.
These new rates stand lower than the 6p per mile fuel duty currently paid by drivers of petrol and diesel vehicles.
The tax rate will see annual increases, aligning with the Consumer Prices Inflation (CPI), with adjustments commencing in the 2029-2030 fiscal year.
Moreover, EV owners may also face eVED charges when traveling abroad, as the system does not track mileage by geographical location.
Simplified eVED arrangements will become available for fleets and leasing companies, incorporating enhanced payment flexibility and options for bulk licensing.
For new electric cars, drivers will have the choice to integrate eVED mileage costs into the vehicle's on-the-road pricing or manage these charges independently.
Any outstanding balance will be settled annually, or drivers can choose to spread the cost over the subsequent 12-month period.
This move redefines how the UK funds its road infrastructure, detaching it from a reliance on fossil fuel taxation.
Historically, road funding has linked intrinsically to fuel consumption, a model now challenged by the rapid adoption of electric vehicles.
The introduction of eVED closes a fiscal gap, as the transition to electric mobility erodes the traditional fuel duty tax base, which generates billions for the Treasury.
The introduction of eVED closes a fiscal gap, as the transition to electric mobility erodes the traditional fuel duty tax base, which generates billions for the Treasury.
Stakeholders across the automotive industry and environmental groups scrutinize the policy's long-term implications for EV adoption rates.
The policy secures a sustainable funding mechanism for roads while the UK progresses towards its net-zero emissions targets.
The landscape of vehicle taxation undergoes its most profound transformation in decades, reflecting both technological advancements and evolving environmental priorities.