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    Home » UK Moves Forward with Pay-Per-Mile Tax for Electric Vehicles
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    UK Moves Forward with Pay-Per-Mile Tax for Electric Vehicles

    July 15, 2026
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    LONDON / RankWire.AI / – The UK government has progressed with plans to implement a pay-per-mile tax on electric vehicles by releasing its consultation response along with draft legislation. HM Treasury published these documents on July 13 and confirmed an implementation date of April 1, 2028. The draft legislation is now subject to a technical consultation that will close on September 7. This new charge, named Electric Vehicle Excise Duty, will run concurrently with the current Vehicle Excise Duty paid by drivers.

    UK advances pay-per-mile tax for electric vehicles
    UK electric vehicle drivers prepare for a new pay-per-mile tax from April 2028.

    Electric battery vehicles and hydrogen fuel cell cars will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile because they also pay fuel duty when using petrol or diesel. For example, an electric vehicle driving 8,000 miles annually would incur a charge of £240, while a driver traveling 10,000 miles would pay £300. The government intends to increase these rates in line with consumer price inflation from the 2029-30 tax year onward.

    Vehicle operators will need to submit an odometer reading when renewing their annual vehicle tax. They will also estimate their mileage for the upcoming tax period, which generally lasts about a year. Payments can be made either as an upfront estimated amount or by spreading payments throughout the year. When a new odometer reading is provided later, the DVLA will reconcile the estimate with actual mileage, utilizing existing MOT mileage records where available, and calculating any difference due.

    Mileage Submission Replaces Additional Checks

    The government has abandoned a previous proposal requiring newer electric cars to undergo separate annual mileage inspections. Since new cars typically do not need an MOT in their first three years, or four years in Northern Ireland, their owners will instead report mileage and provide estimates at each tax renewal. The initial MOT will offer a verified reading for comparison purposes. Nonetheless, the DVLA retains the authority to order an official mileage check if it suspects fraud or noncompliance.

    This system will not involve tracking devices or collect data about individual trips. It also will not differentiate rates based on the location or time of travel. As such, miles driven abroad by UK-registered vehicles will count towards the tax. The scheme applies to battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles. However, electric vans, buses, coaches, and heavy goods vehicles will remain outside the initial scope. Connected-car mileage reporting will continue to be optional.

    Consultation Influences Final Tax Framework

    During the consultation period from November 2025 to March 2026, the HM Treasury received a total of 5,133 responses, with 92% coming from individuals. Stakeholders expressed concerns about administrative burdens, mileage verification, potential fraud, overseas travel, and impacts on fleet operators. In response, the government has decided to simplify procedures for leasing and rental companies. Proposed measures include estimated readings, bulk licensing, and more flexible payment options. Officials will also develop guidance and tools to assist drivers in estimating their annual mileage.

    The impact assessment estimates that approximately 5.6 million vehicles will be affected in the 2028-29 fiscal year. This initiative is projected to generate revenue of £1.1 billion in that year, as certified by the Office for Budget Responsibility. Revenues are expected to grow to £1.44 billion in 2029-30 and reach £1.87 billion in 2030-31. Prior to the start of the electric vehicle mileage tax, the government will undertake work on DVLA systems, payment regulations, mileage verification, refunds, penalties, appeals, and dispute procedures.

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