UK Government Sets 2028 Launch for Pay-Per-Mile EV Tax

The Government of the United Kingdom confirmed that the Electric Vehicle Excise Duty (eVED), a pay-per-mile tax, will launch in April 2028. Under the new system, fully electric vehicles will be taxed at 3p per mile and plug-in hybrids at 1.5p per mile. These rates are designed to recover lost fuel duty revenues from petrol and diesel vehicles, which average 6p per mile. The tax applies to all travel, including trips abroad.

Drivers will make upfront payments based on mileage estimates, with actual readings verified annually through MOT tests or registration anniversaries. While the government is open to investigating real-time telematics data, it is not currently part of the policy. Electric vans are initially exempt from the charge.

Following industry backlash, the government introduced concessions for fleet, rental, and leasing companies. These include allowing bulk payments, removing annual mileage checks for newer pre-MOT vehicles, and permitting liabilities to be settled before defleeting.

Industry groups, including the British Vehicle Rental and Leasing Association and the Electric Vehicle Association England, have criticized the scheme as overly complex. Leaders from these organizations and Alphabet GB warn that the tax could increase costs for drivers, penalize early adopters, and derail the transition to electric vehicles. Alphabet GB has urged Prime Minister Andy Burnham to scrap the proposal in favor of integrating charges directly into charging infrastructure tariffs.