From April 2028, electric car drivers in the UK will start paying a new 3p‑per‑mile road tax, on top of standard Vehicle Excise Duty (VED).
The system, called electric Vehicle Excise Duty (eVED), is the government’s answer to shrinking fuel‑duty revenues as more motorists switch to electric.
How EV tax works now
Right now, EVs sit in a halfway house. From April 2025, most electric cars start paying:
- £10 in year one
- £195 a year from year two onwards
- No charge per mile driven
That regime runs until the end of March 2028.
What changes with EV tax from April 2028
From 1 April 2028, eVED comes in for all UK‑registered battery‑electric and plug‑in hybrid cars. It adds a distance‑based charge on top of ordinary VED:
- Battery electric vehicles (BEVs): 3p per mile
- Plug‑in hybrids (PHEVs): 1.5p per mile
- Uprated with inflation from 2029‑30
VED itself remains at roughly £195 a year for most EVs, so drivers will effectively face a fixed annual charge plus a pay‑per‑use element.
For a typical EV driver covering 8,500 miles a year, that means:
VED: £195
eVED: 8,500 × £0.03 = £255
Total: £450 a year in motoring tax
By comparison, a similar petrol car might pay £195 in VED plus around £480 in fuel duty – roughly £675 in total – so even with eVED, EVs still come out ahead on tax alone.
How the pay‑per‑mile system will work
The new scheme is designed to feel familiar, running through the existing VED process with some extra steps.
Estimate your mileage: when you renew VED, you’ll also estimate how many miles you expect to drive that year, with government guidance based on MOT history and past use.
Pay through the year: you pay the eVED element alongside VED, either upfront or in instalments (such as monthly), in the same way many people already spread car tax payments.
Year‑end balancing: at the end of the year, your estimated miles are compared to your actual mileage. If you drove more, you pay the difference. If you drove less, you get a credit or refund.
Ministers have said they want this reconciliation to be “light‑touch”, focusing on simple adjustments rather than penalties for honest mis‑estimates.
Mileage checks and privacy
One of the main public concerns around road pricing is tracking. The Treasury has ruled out GPS‑based monitoring and says it will not collect data on where or when people drive.
Instead, the system uses mileage readings the state already sees:
- Cars over three years old: mileage is confirmed at the MOT, as it is now.
- Cars under three years: government‑funded checks on the first and second registration anniversaries at MOT centres or similar approved sites.
All the government sees is total miles at specific dates. It does not get a log of routes or journeys.
Who will pay for the new eVED – and who won’t (for now)
From April 2028, eVED will apply to:
- All battery‑electric cars
- All plug‑in hybrid cars
- Company cars, including salary‑sacrifice vehicles
Some groups that are currently VED‑exempt, such as many disabled drivers, will still pay eVED, reflecting the fact they also pay fuel duty on petrol or diesel today.
The following are outside the scheme at launch:
- Electric vans, buses and coaches
- Motorcycles and HGVs
- Hydrogen fuel cell vehicles (under review)
- Conventional (non‑plug‑in) hybrids
The government has indicated that commercial vehicles could be brought into the framework later, once the car system is proven.
Why is the government doing this?
Fuel duty currently raises around £25 billion a year, but that figure is expected to fall sharply as EV uptake grows. Without changes, that would leave a long‑term gap in road funding and general taxation.
By setting the EV rate at around half the effective fuel‑duty cost per mile for petrol and diesel drivers, ministers say they can:
- Protect revenues in a way that feels more usage‑based and fair
- Ensure all drivers contribute something for road use
- Keep EVs clearly cheaper to run than fossil‑fuel cars
Chancellor Rachel Reeves has also linked the policy to higher spending on road maintenance, arguing that a dedicated per‑mile charge makes it easier to justify those budgets.
