Motorists across the UK are reportedly considering illegal measures to avoid a new road tax charge proposed by the Labour government, sparking major concerns about fraud.
Pay-Per-Mile Plan Sparks Fraud Fears
Chancellor Rachel Reeves has been issued a stark warning that her planned pay-per-mile electric car tax could lead to a dramatic increase in vehicle mileage tampering. The new levy, known as eVED (Electric Vehicle Excise Duty), is slated for introduction in 2028 and would charge drivers 3p for every mile they travel.
The system is designed to replace lost fuel duty revenue as drivers switch to electric vehicles. It would function by using annual odometer readings taken during a vehicle's MOT test to calculate the tax owed.
Industry Warns of "Wave of Fraudulent Activity"
Leading motoring bodies have condemned the proposal. Toby Poston, Chief Executive of the British Vehicle Rental and Leasing Association (BVRLA), called it "the wrong policy at the wrong time."
He warned that the scheme not only creates massive administrative problems for electric vehicle fleets but also directly incentivises people to tamper with their mileages. This practice, known as "clocking," involves illegally winding back a car's odometer to show a lower total distance travelled.
"Delivering this regime in its current form risks fuelling a wave of fraudulent activity that would see the Treasury recoup less, while simultaneously eroding confidence in the fragile used EV market," Poston stated.
Government Acknowledges Tampering Risk
Official government consultation documents explicitly recognise the danger. They note that while odometers are simple to read, they "can be subject to tampering." Current estimates suggest around 2.3% of UK vehicles may already show signs of having been clocked.
The documents admit: "The Government recognises that the introduction of eVED may increase the likelihood of motorists choosing to clock their vehicles, or allowing the odometer to be inoperative."
In response, officials say they are "considering further options to mitigate against odometer tampering" and intend to work with manufacturers, the leasing industry, and insurers to minimise fraud. They pledge to take "necessary legislative, regulatory and technical steps to widen existing law and strengthen enforcement."
In a separate tax move, the government also announced it will close a VAT loophole for many taxis outside London. This change could lead to fare increases if firms pass the new 20% charge on to passengers. Chancellor Reeves further stated she would "improve competition in our taxi industry by ending ride-hailing companies’ use of a discount scheme intended for coach tours."
