Electric Vehicle Road Tax: What Drivers Need to Know About the Upcoming Changes
British motorists who have made the switch to electric vehicles (EVs) or plug-in hybrids are facing a significant shift in how their vehicles will be taxed. Chancellor Rachel Reeves has confirmed a new pay-per-mile tax, set to come into effect in April 2028, impacting running costs for EV owners.
The New Tax: How Will It Work?
The upcoming Electric Vehicle Excise Duty (eVED) will charge drivers based on the distance they travel. EV drivers will pay 3p per mile, while those driving plug-in hybrids will be charged 1.5p per mile. For someone covering 10,000 miles annually, this translates to a £300 annual cost for EV drivers.
The average British driver covers around 8,500 miles per year, but many exceed this figure, particularly those with longer commutes or who live in rural areas. This has raised concerns about disproportionate impacts on certain drivers.
Why the Change? Addressing Declining Fuel Duty Revenue
The introduction of eVED is directly linked to the decline in fuel duty revenue as more drivers transition to electric vehicles. As fewer petrol and diesel vehicles are on the road, the government needs to find alternative revenue streams to maintain funding for road infrastructure and other public services.
Ministers have highlighted that petrol and diesel drivers already pay for road usage through fuel costs and duty and the new tax aims to create a more equitable system.
How Will the Tax Be Collected?
The government has stated that eVED will not require the installation of trackers in vehicles, nor will it necessitate a completely new tax system. Drivers will pay the mileage charge alongside their existing Vehicle Excise Duty (VED), commonly known as road tax.
The consultation document on the new charge emphasizes that the goal is to maintain incentives for switching to electric vehicles while ensuring all car drivers contribute to road funding.
Impact on EV Adoption
The introduction of this tax has sparked debate about its potential impact on the adoption of electric vehicles. While some argue it’s a fair way to replace lost fuel duty revenue, others worry it could discourage drivers from making the switch to EVs, potentially hindering the UK’s net-zero goals.
Experts at the Society of Motor Manufacturers and Traders (SMMT) have questioned the scheme, and concerns have been raised about fairness, particularly for rural drivers and those who rely on their cars for essential journeys.
What Drivers Are Saying
Reader responses have been mixed, with some supporting the per-mile charge as a fairer system and others expressing concerns about its impact on affordability. Many believe that the tax should be carefully balanced to avoid becoming a disincentive for EV ownership.
FAQ
- When will the new tax come into effect? April 2028.
- How much will EV drivers pay per mile? 3p per mile.
- How much will plug-in hybrid drivers pay per mile? 1.5p per mile.
- Why is the government introducing this tax? To offset the decline in fuel duty revenue as more drivers switch to electric vehicles.
- Will my car be tracked? No, the government has stated that trackers will not be required.
Pro Tip: Consider your annual mileage when evaluating the total cost of EV ownership, factoring in the new pay-per-mile tax to get a realistic picture of your potential expenses.
Stay informed about the latest developments in EV taxation and road policies. Explore our other articles on electric vehicles and sustainable transportation for more insights.
