Motorists across the UK are bracing for a significant change to vehicle taxation as the Labour Party prepares to roll out a new pay-per-mile system. The policy, expected to be announced by Chancellor Rachel Reeves next week, could see many drivers facing hundreds of pounds in additional charges.
The New VED+ System Explained
The proposed VED+ system would fundamentally alter how car tax is calculated, shifting from a fixed annual rate to a charge based on distance driven. Analysis of the plan reveals that the average electric vehicle (EV) driver could be disproportionately affected.
According to data from Carwow Leasey, the average annual mileage for a consumer EV is 9,900 miles. Under the proposed 3p-per-mile tax rate, this would result in an annual charge of £297 for the typical EV owner.
Paul Barker, an editor, highlighted the compounding financial pressure, stating: "This is on top of the removal of other incentives, such as the EV exemption on Vehicle Excise Duty." The situation is even more stark for business users, who average 11,380 miles annually and could face a yearly bill of £341.40.
Potential Impact on Electric Vehicle Adoption
Industry experts are warning that this new tax could severely hamper the UK's transition to electric transport. At a time when EV uptake is critical for meeting national emissions targets, increasing the cost of ownership risks slowing progress.
Mr Barker expressed concern that the policy adds "another deterrent for business EVs, and it is business sales that are currently driving market growth." He suggested that if taxes must increase, the government should first address the high cost of using public chargers, which could help maintain momentum for EV adoption.
Call for a Fair Deal on EV Taxes
Michael Dnes, head of transport policy at Stonehaven, pointed to a fundamental inequity in the current infrastructure that the new tax could exacerbate. "Right now, there are big differences in how easy it is to go electric, and the system favours people who own a house with a driveway," he said.
Dnes emphasised that those without home charging capabilities can pay ten times as much to charge the same battery. He argued that for any new tax to be fair and not further hinder sales, the government must implement new measures to grow the market, specifically mentioning that over 10 million homes are currently frozen out of cheap charging solutions.
The coming week's announcement is set to define the financial landscape for UK drivers for years to come, with significant implications for the nation's green transport ambitions.
