Chancellor Rachel Reeves is set to introduce a significant shake-up to car tax, with a new pay-per-mile system coming into effect from Wednesday, 26 November.
The New Pay-Per-Mile Charge
Under the new rules, some drivers could effectively be paying 6p per mile to drive. This figure aligns with the latest AA Recharge Report for September, which found the average cost per mile to charge an electric vehicle (EV) on a domestic tariff is 5.88p.
The Chancellor is expected to announce road pricing specifically for electric cars during her speech to the Commons. While the immediate charge is set at 3p per mile, the government is also expected to rubberstamp a broader road pricing scheme for 2028, pending a public consultation.
Industry Reaction and Double Taxation Fears
The motoring industry has reacted with concern. Edmund King, president of the AA, highlighted a major issue for drivers travelling to France. He told The Telegraph: "You would effectively be paying tax twice – to both the French and UK Government."
King expressed scepticism about a practical solution, warning that extra border checks for mileage certification would be a "bureaucratic" nightmare and could exacerbate existing border delays.
Steve Gooding, director of the RAC Foundation, suggested the Treasury is scrambling as the traditional "fuel duty cash-cow" dwindles with the rise of EVs. He added that if the Chancellor wants to encourage EV take-up, she must address the high cost of public charging for the millions without home charging options.
Risks to the EV Transition
David Martell, chief executive of homecharger manufacturer Andersen, issued a stark warning. He stated that a "rushed or poorly designed road pricing scheme risks undermining confidence in electric vehicles at a crucial time."
Martell cautioned that if the government gets this wrong, it could stall the transition to cleaner transport and damage a growing British industry built around EV innovation and home charging.
