Electric vehicle (EV) ownership is on the rise in the UK, driven by both environmental consciousness and the government’s push for greener transportation options. However, a major shift is coming in 2028 that could change the game for many EV drivers. In an effort to bridge the gap in road tax revenues as petrol and diesel cars phase out, the UK government has introduced a new pay-per-mile tax for electric vehicles.
The New Tax: A £300 Hit Per Year
From April 2028, electric and plug-in hybrid car owners will face an additional excise duty on the miles they drive. As reported by Birmingham Mail, this new charge will be based on the distance traveled, with rates set at 3p or 1.5p per mile. While this may seem like a small amount, the cost quickly adds up. For instance, a driver covering 10,000 miles a year will face an extra £300 charge annually, on top of their existing vehicle tax.
This change is part of the government’s broader effort to address the diminishing revenue from fuel and duty costs as more drivers shift to electric vehicles. Petrol and diesel car owners currently pay road tax through fuel duty, but as EVs become more widespread, that revenue is drying up. This new charge is an attempt to fill the gap and ensure that EV drivers contribute their fair share to road maintenance.
Will This Stunt The EV Revolution?
While the government’s motives may seem fair, aiming to create a more balanced tax system, there are concerns that the new charges could backfire. Many experts believe that this tax might put off potential EV buyers, especially those who rely on their cars for long-distance travel. Simon England, founder of ALA Insurance, raises a key point:
“Drivers are being encouraged to switch to electric cars ahead of the 2030 ban on ICE vehicles but financial incentives are quickly disappearing. If EV drivers are expected to pay the same, or more, than petrol and diesel drivers, then that’s a legitimate barrier that will deter thousands of road users from switching.”
With the government actively pushing for electric vehicles to become the standard, this new mileage tax could present a significant roadblock for drivers considering a switch to electric. The additional cost could be particularly burdensome for those who have already made the investment in an electric vehicle, only to face higher ongoing expenses in the form of this new mileage tax.
The Impact on EV Adoption
The introduction of this new charge is expected to slow down the momentum of electric vehicle adoption. If the tax burden grows too heavy, many drivers might choose to hold onto their petrol or diesel vehicles for longer than initially planned. The government’s 2030 deadline for banning new petrol and diesel cars could then face serious resistance, as financially strapped consumers look to avoid the costs of switching.
England further elaborates on this issue, noting that “The rise in EV adoption will leave quite a gap in the government’s revenue from road tax, but raising taxes for electric cars is definitely off-putting to people considering a switch, especially when they won’t have a choice from 2030, as it stands.” This concern is critical as it questions whether the government’s strategy will succeed in pushing consumers toward electric vehicles or whether it will simply alienate potential adopters.
Government’s Stance: Creating A Fairer System
In defense of the new mileage tax, Treasury Minister Dan Tomlinson explained that, “At Autumn Budget 2025, the Government announced the introduction of electric vehicle excise duty (eVED), a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028. Drivers will pay for their mileage alongside their existing vehicle excise duty (VED).”
The government’s goal is to create a more sustainable and equitable system, where electric vehicle owners contribute to the same road maintenance costs as their petrol and diesel counterparts. However, the success of this initiative depends on how it is implemented and whether it strikes the right balance between generating revenue and encouraging the widespread adoption of electric vehicles.
