LONDON / RankWire.AI / – The UK government has advanced its plans for a pay-per-mile tax on electric vehicles by publishing its consultation feedback and proposed legislation. HM Treasury issued the relevant documents on July 13, setting April 1, 2028, as the scheduled start date. Named Electric Vehicle Excise Duty, the new measure will impose a mileage-based fee on top of the existing annual vehicle tax for qualifying cars. A technical consultation on the draft clauses will close on Sept. 7, 2026.
Electric cars powered by batteries and hydrogen fuel cells will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile, as their petrol or diesel engines also attract fuel duty. These rates will adjust with consumer price inflation from the 2029-30 tax year onward. At the starting rates, driving 8,000 miles annually would cost an electric vehicle owner £240, while 10,000 miles would amount to £300. This fee will be paid in addition to the standard Vehicle Excise Duty.
Vehicle owners will need to provide an odometer reading during their vehicle tax renewal and estimate their mileage for the upcoming tax period, typically one year. They may opt to pay the estimated amount upfront or distribute payments throughout the year. The Driver and Vehicle Licensing Agency will later compare actual readings with the estimates and determine any balance owed. Existing MOT records will assist in verifying readings for vehicles already subject to annual testing. The process will integrate into the current vehicle tax system.
Mileage reporting process sidesteps additional inspections
The government has dropped its plan for separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners will report their odometer readings and provide an annual mileage estimate. The first MOT will serve as a verified reading for comparison with previous submissions. In Great Britain, most cars undergo MOT testing after three years, whereas in Northern Ireland, the threshold is four years. Officials may still require a check if fraud or non-compliance is reasonably suspected.
The scheme will not employ mandatory tracking devices or record individual journeys. Mileage accumulated outside the UK will count, as the charge is based on total odometer distance. Initially, the scheme will include battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. Electric vans, buses, coaches, and heavy goods vehicles will be excluded at launch. Drivers may later opt for an optional system that collects mileage data from connected cars.
Details from consultation outline implementation plans
The consultation period ran from Nov. 26, 2025, to March 18, 2026, garnering 5,133 responses. While 92% of submissions came from individuals, organizations such as businesses and public authorities also participated. Concerns raised included administration, mileage verification, flexible payment options, fleet management, and odometer fraud prevention. The revised framework allows fleets and leasing firms to submit estimated readings and manage bulk licensing, offering greater flexibility in payment arrangements for large vehicle operators.
The government projects that about 5.6 million vehicles will be subject to this tax in the 2028-29 fiscal year. The Office for Budget Responsibility has forecast revenue of approximately £1.1 billion for that period. Revenues are expected to increase to £1.435 billion in 2029-30 and reach £1.865 billion in 2030-31. Work now underway covers legislation, payment infrastructure, mileage verification, refunds, penalties, appeals, and dispute resolution. Motorists will begin paying the new fee with their first vehicle tax renewal after April 1, 2028.