Chancellor Rachel Reeves has confirmed a new motoring tax that will impact drivers of certain vehicles. The pay-per-mile tax, set to begin in April 2028, will charge motorists based on the distance they travel annually. Owners of electric vehicles (EVs) and plug-in hybrids will be subject to this levy, with rates of 3p per mile for EVs and 1.5p per mile for plug-in hybrids. For an EV driver covering 10,000 miles per year, this amounts to an additional £300 on top of the standard vehicle tax of £200 for most newer cars.
Impact on Drivers
The average UK driver travels around 8,500 miles annually, but many cover significantly more, leading to higher charges. Those who use their cars for work or reside in rural areas are expected to be hit hardest. Industry experts warn that this tax could deter people from switching to electric vehicles ahead of the 2030 ban on new petrol and diesel models.
Expert Concerns
Simon England, founder of ALA Insurance, commented: "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. 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."
Government Stance
While some drivers may view the new tax as unfair, the Government argues that it ensures everyone contributes to road maintenance and other costs. The tax is part of broader efforts to adapt to the growing number of electric vehicles on the road.
