Electric Car Tax UK: New 3p-Per-Mile Charge Confirmed for 2028

The UK government has confirmed a new pay-per-mile road tax for electric vehicles. The charge will begin in April 2028. It aims to replace lost fuel duty revenue as drivers switch to electric cars.

Electric car owners will pay 3 pence for every mile driven. Plug-in hybrid drivers will pay 1.5 pence per mile. According to BBC News, these rates will increase annually with inflation.

How the New EV Tax System Will Work for Drivers

The system will use annual mileage checks. This will happen during a car’s MOT test. For newer cars, it will be checked at their registration anniversary.

The mileage charge will be combined with Vehicle Excise Duty. An average EV driver covering 8,500 miles will pay about £255 per year. The Treasury expects to raise £1.1 billion in the first year.

This is roughly half the fuel duty paid by a petrol driver for similar mileage. The policy is now under public consultation. Final details will be confirmed later.

Challenges and Criticisms of the Mileage Tax Plan

The plan faces several practical challenges. A major issue is tracking mileage driven outside the UK. This is a concern for drivers in Northern Ireland who cross into Ireland.

Experts suggest technology like GPS could differentiate UK miles. No official solution is confirmed yet. The government also acknowledges a risk of odometer tampering.

Some critics say the flat rate is unfair. It does not account for a vehicle’s weight or efficiency. Others argue it penalises early adopters who followed government advice to buy EVs.

According to The Guardian, evidence given to Parliament suggested fuel duty was fairer. It reflects external costs like road wear and emissions better than a simple mileage charge.

Timeline of EV Taxation Changes

This new charge is part of a broader shift. Electric cars became liable for Vehicle Excise Duty in April 2025. The first-year rate is £10, rising to a standard £195 yearly rate.

Expensive EVs over £40,000 pay an extra £425 premium. London’s congestion charge will start applying to electric cars in 2026. The 2028 per-mile tax adds a third layer of new costs for EV owners.

The new UK electric car tax marks a pivotal moment in transport policy. It seeks to ensure all drivers contribute to road funding fairly. Its final design will significantly impact the nation’s shift to cleaner transport.

Info at your fingertips

When does the new electric car tax start?

The pay-per-mile charge begins in April 2028. Electric vehicles will pay 3p per mile driven. Hybrid vehicles will pay a reduced rate of 1.5p per mile.

How will the government track my mileage?

Mileage will be recorded during your annual MOT test. For newer cars not yet needing an MOT, it will be checked at the vehicle’s registration anniversary. The charge will then be added to your Vehicle Excise Duty bill.

What about miles driven outside the UK?

This remains an unresolved issue, particularly for Northern Ireland drivers. The government is consulting on solutions, which may involve technology to distinguish UK road use from foreign travel. No final method has been announced.

Are other EV taxes changing too?

Yes. Electric cars started paying Vehicle Excise Duty in April 2025. Furthermore, from 2026, electric cars will no longer be exempt from London’s Congestion Charge. The 2028 mileage tax is an additional new charge.

Why is this tax being introduced now?

The government says it is needed to replace falling fuel duty revenue. As more people switch from petrol and diesel to electric cars, the Treasury loses a major income stream used to maintain roads.

Will this discourage people from buying electric cars?

Some industry groups and motoring organisations warn it might. They say stacking new taxes on EVs could slow adoption. The government argues the total cost of owning an EV will still be competitive with traditional cars.