A new pay-per-mile tax set to target electric vehicle (EV) owners in the UK is causing concern as it is confirmed to be introduced in 2028. The tax, which will charge EV owners based on the miles they drive each year, could significantly increase running costs for drivers, particularly those with long commutes or who live in rural areas. The move comes as the government seeks to plug a growing gap in fuel duty revenues, caused by the increasing popularity of electric vehicles. However, critics argue that it may slow the country’s transition to cleaner transport.
Government’s Push for Fairness in Vehicle Taxation
The new tax will be implemented alongside the existing Vehicle Excise Duty (VED), which drivers already pay for their vehicles. According to Chancellor Rachel Reeves, the Electric Vehicle Excise Duty (eVED) will charge EV owners 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile. For an average driver covering around 8,500 miles annually, this would add an additional £255 in taxes, with those who drive more than 10,000 miles a year facing a £300 increase.
Ministers argue that this move is necessary to maintain fairness between petrol and diesel drivers and those who use electric vehicles. Since petrol and diesel drivers already pay fuel duties based on how much they drive, it is felt that EV owners should also contribute to road maintenance and infrastructure. The charge aims to fill the gap in fuel duty revenues as the government anticipates a decline in fuel consumption due to the rise in electric cars.
Simon Williams, head of policy at the RAC, highlighted the potential downside of the new tax. He pointed out that taxing all plug-in vehicles per mile might slow down the adoption of electric cars, which the government has been encouraging as part of its green agenda. The new system is designed to help offset the loss in fuel duty income, but it might also deter those considering switching to electric vehicles. The RAC has warned that the introduction of this tax could be perceived as a further barrier to the wider acceptance of EVs.
Charging System Details: How It Will Work
The eVED will not require new technology like trackers in cars, and drivers won’t need to interact with a completely new tax system. According to the government, drivers will simply pay the tax alongside their regular road tax payments. The tax is designed to be straightforward, ensuring that all motorists, including EV owners, contribute their fair share.
Despite the simplicity of the system, the new charge has faced backlash from several quarters. Critics argue that it disproportionately impacts those in rural areas, where long commutes are more common. For these individuals, the new charge could lead to significantly higher costs, making electric vehicles seem less attractive. Additionally, the government’s plan to introduce the tax in 2028 means that the UK’s transition to electric vehicles might face some uncertainty in the years ahead.
In the meantime, ministers insist that the move is necessary to maintain a fair taxation system for all motorists. According to Treasury minister Dan Tomlinson, the charge will “ensure all car drivers contribute,” but will still offer incentives for switching to electric vehicles. While it is clear that this new tax is a response to the growing uptake of electric cars, the government’s challenge will be ensuring that it does not hinder progress towards a greener, cleaner future.
