The UK’s new pay per mile tax plans have already drawn criticism.
Chancellor Rachel Reeves announced that electric vehicle owners and plug-in hybrid drivers will pay 3p per mile and 1.5p per mile from April 2028.
An average EV driver in the UK covers 8,740 miles a year. In that distance, the driver will pay an extra £262.20 annually in the name of normal vehicle excise duty (VED).
Seeing the current oil crisis in the world, people are moving away from petrol and diesel cars. The government believes that this tax is the best way to fill that fuel duty gap and pay for road maintenance. But not everyone is convinced.
Key Points
- Electric car drivers may pay 3p per mile from April 2028
- Plug-in hybrid owners could pay 1.5p per mile
- The new charge would sit alongside the existing road tax
- Drivers will not need trackers in their cars
- Mileage checks will happen through MOT records
- Experts warn the move could slow EV adoption in the UK
- The Treasury says the tax will help replace lost fuel duty income
What Is A Pay Per Mile Tax?
It is a proposed national road tax for electric and plug-in hybrid cars in the UK. Earlier, drivers used to pay fuel duty on petrol and diesel. In the future, EV owners will have to pay tax on every mile they drive.
According to reports from the BBC, this new system is a scheme of electric vehicle excise duty, also known as eVED. The rates announced so far are:
- 3p per mile for fully electric cars
- 1.5p per mile for plug-in hybrids
The Office for Budget Responsibility said that the new charge is half of the fuel duty rate paid by petrol/diesel drivers.
Why Is The Government Bringing It In?
The main reason is money.
Fuel duty has been a key source of income for the government for years. But when more people are switching to electric cars, fuel consumption has decreased, which means tax revenue has decreased.
Rachel Reeves said the new system would make sure drivers are “taxed according to how much they drive and not just the type of car they own”.
The government says it will use the money generated from this tax to improve roads and transport infrastructure across England.
The new tax will collect around £1.1 billion in 2028-29 and £1.9 billion by 2030.
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How Will The Pay Per Mile Tax Work?
One of the hottest questions UK drivers have: How does pay per mile work?
Many people claim that the government will force motorists to install trackers or black boxes in their cars. But ministers have denied the claim.
A government spokesperson said: “eVED will not require ‘trackers’ in cars, nor will the government ask people to interact with a whole new tax system.” Instead, mileage will be checked through MOT tests or registration checks for newer vehicles.
According to BirminghamLive reports, the payment system will be added to the existing DVLA road tax process.
Still, there are concerns about odometer tampering, often called “clocking”. The government has admitted it is looking at ways to stop drivers from doing so.
Experts Say Drivers May “Think Twice” About EVs
Several motoring experts have warned that this tax will make people hesitate before buying an electric car.
John Wilmot, founder and CEO of LeaseLoco, said: “One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay per mile tax risks eliminating that advantage.”
According to YouGov figures mentioned by the Mirror, 55% of people looking to buy a new car still prefer petrol vehicles. Only 37% are thinking about electric models.
John Wilmot also warned that this rule would make buyers uncertain. He said, “Drivers want clarity before committing to making the switch to electric, and it’s hard to have confidence when the rules and the costs keep changing.”
Will Pay Per Mile Replace Road Tax?
The answer is no.
The pay per mile system will work with the existing road tax. Drivers will have to pay vehicle excise duty on top of the mileage charge.
A huge portion of people believe the pay per mile system will be permanent for road charging in the UK, as new petrol and diesel cars will be banned in 2030.
The government has already announced that all new cars sold from 2030 onwards will be either electric or hybrid.
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EV Drivers Say They Feel “Penalised”
Some electric car owners say the plans feel unfair.
GBN reported that EV owner Stephen Walton said buying an electric car now “doesn’t make financial sense”.
He added: “I’ve paid more to do the right thing and I’m being penalised for it.”
Industry groups have also criticised the move. Ford described the tax as “the wrong measure at the wrong time”, and the Society of Motor Manufacturers and Traders warned it could “undermine demand” for electric cars.
Charging company InstaVolt also said rural drivers and people without home chargers could be hit hardest because public charging is already expensive.
Sources & References
- BBC. (2026). Pay‑Per‑Mile: Electric vehicle excise duty (eVED) explained.
- BirminghamLive. (2026). Rachel Reeves announces new £240 road tax system.
- Mirror. (2026). UK drivers still prefer petrol vehicles despite new tax rules.
- GB News. (2026). Pay‑per‑mile taxes on electric cars: Drivers react.
Disclaimer: This article is intended solely for informational and educational purposes. The content does not constitute financial, legal, automotive, or governmental advice, nor does it promote any product, policy, or organisation. Readers are advised to verify official announcements and consult relevant authorities or professionals before making any decisions based on the information provided.
