The UK Government has confirmed that a new pay-per-mile tax for electric vehicles (EVs) will come into force from April 2028, marking one of the biggest changes to motoring taxation since the introduction of fuel duty.
Under the new electronic Vehicle Excise Duty (eVED) system, drivers of fully electric vehicles will pay 3p per mile, while plug-in hybrid owners will be charged 1.5p per mile. Both rates remain lower than the estimated 6p per mile currently paid by petrol and diesel drivers through UK fuel duty.
Rather than charging motorists after they have driven, the new system will work on estimated annual mileage.
Drivers will declare how many miles they expect to travel over the coming year and pay an upfront charge based on that estimate. The cost can either be paid in one lump sum or spread across monthly instalments, in a similar way to the current Vehicle Excise Duty system.
At the end of each year, motorists will submit an updated odometer reading. This will be checked against the vehicle's annual MOT test or, for newer cars that have not yet reached their first MOT, against a mileage reading taken around the second or third anniversary of registration.
If the vehicle has covered more miles than originally estimated, drivers will pay the difference. If it has travelled fewer miles, any credit can be offset against future payments.
The Government has also confirmed that electric vehicle owners will continue to pay eVED even when driving abroad, after ruling out proposals to charge motorists based on where or when they drive.
Although the initial scheme relies on estimated mileage and annual verification, ministers have said they welcome further investigation into the use of on-board telematics to simplify mileage reporting in the future. However, location-based charging and continuous vehicle tracking are not part of the current proposals.
The announcement has prompted criticism from parts of the automotive industry.
Electric Vehicle Association England argued that the scheme remains unnecessarily complicated and risks undermining confidence among drivers considering the switch to electric vehicles.
Meanwhile, the British Vehicle Rental and Leasing Association (BVRLA) warned that the proposals could discourage EV adoption while adding unnecessary complexity for fleet operators and private motorists alike. The organisation is calling on the Government to work more closely with the industry on a simpler, technology-led solution.
The new mileage-based tax comes as the UK continues its transition towards electrification, with the Government looking to replace declining fuel duty revenues as more drivers move away from petrol and diesel vehicles.
For EV owners, however, the message is now clear: from April 2028, the number of miles you drive will directly influence how much vehicle tax you pay.
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