The UK government is preparing to introduce a “pay-per-mile” tax for electric vehicles (EVs) and plug-in hybrids (PHEVs) from April 2028. This marks a significant shift in how road use is taxed, aiming to replace lost fuel duty revenue as more drivers switch to electric. Here’s what you need to know.

• eVED rates will be uprated annually with inflation (CPI) from 2029-30 onwards.

• The VED Expensive Car Supplement threshold for EVs will rise to £50,000 from April 2028.

• The first-year VED rate for zero-emission cars will remain at £10 until at least 2029-30.

Why Is the UK Introducing a Pay-Per-Mile Tax for Electric Cars?

As electric vehicles become more popular, the government faces a sharp decline in fuel duty—a major source of funding for roads and infrastructure. The new pay-per-mile system is designed to ensure all drivers contribute fairly, regardless of how their vehicle is powered. By 2030, one in five car drivers could pay no fuel duty at all, so eVED helps protect public finances and keeps the system fair.

Will Electric Cars Be Taxed Per Mile?

Yes. From April 2028, fully electric cars will be subject to a charge of 3p per mile. Plug-in hybrids will also be included, but at a lower rate—around 1.5p per mile—reflecting their partial use of petrol or diesel, which is already taxed.
Mild hybrids, which mainly run on petrol or diesel with only a small electric boost, are not expected to be included in the scheme at this stage.

How Will Pay-Per-Mile Taxation Work?

The system is set to be honesty-based, avoiding intrusive GPS tracking. Here’s how it will operate:

• Self-Declaration: Each year, when paying Vehicle Excise Duty (VED), drivers will estimate their expected mileage for the coming year.

• Payment: The per-mile charge will be paid upfront or in monthly instalments, based on this estimate.

• Adjustments: If you drive fewer miles than estimated, you’ll receive a credit for the next year. If you exceed your estimate, you’ll need to pay the difference.

• Auditing: Mileage will be checked using MOT odometer readings or, for new cars under three years old, at accredited providers around the first and second registration anniversaries (no charge to motorists).

• Flexibility: If your circumstances change during the year (such as illness or a change in employment), you can notify DVLA to adjust your estimated mileage and payments.

Will Hybrid Cars Be Charged Per Mile?

Plug-in hybrids (PHEVs) will be charged, but at a lower rate than fully electric cars. Mild hybrids, which rely mostly on their combustion engine, are not included as they continue to pay fuel duty at the pump.

What Will It Cost the Average Driver?

For a typical EV driver covering 10,000 miles a year, the annual tax would be about £495—£300 in per-mile charges plus £195 in VED. This is roughly half the rate paid by petrol and diesel drivers in fuel duty.
Rates will rise each year with inflation.

How Will the System Be Enforced?

The government plans to use existing systems, such as MOT checks, to verify mileage. For new cars, mileage checks will be required at accredited providers in the first three years. There’s no plan for GPS tracking, but there will be checks to prevent odometer tampering. Penalties for fraud or non-compliance will be aligned with those for VED (fines, wheelclamping, impounding, etc.). If you overestimate your mileage, the extra is carried forward; if you underestimate, you’ll be asked to top up.

If you sell your car, the paid-for mileage stays with the vehicle and is visible to the new owner. If you scrap your car, a final mileage reading will be required to settle eVED.

What Are the Arguments For and Against?

Supporters say it’s only fair that all road users contribute to maintenance and infrastructure, especially as EVs become more common.
Critics worry the extra cost could slow the transition to electric vehicles, just as the government is encouraging drivers to make the switch.
The government is investing £3.6bn in grants, chargepoint rollout, and business rates relief for EV infrastructure, with most early eVED revenue reinvested to help consumers and the automotive sector.

What Questions Remain?

• Will the rates rise with inflation? Yes, from 2029-30 onwards.

• How will the system handle new cars, which don’t need an MOT for three years? Mileage checks will be required at accredited providers.

• Could the scheme be extended to all vehicles in future? Currently, only cars are included; other vehicle types may be considered later.

• What about drivers who already pay VAT on public charging? No change; eVED is separate from energy taxes.

Conclusion

The pay-per-mile tax for electric and plug-in hybrid vehicles is set to reshape how UK drivers pay for road use. With the scheme expected to launch in 2028, and a public consultation open until March 2026, drivers have time to consider how these changes might affect them. The government is seeking views on the design and implementation of eVED, so you can have your say. As always, the devil will be in the detail—so keep an eye out for further announcements.