HM Treasury has confirmed it will introduce pay-per-mile car taxes following a lengthy consultation after Rachel Reeves' Budget. The Labour Party government announced electric Vehicle Excise Duty (eVED) at the Autumn Budget 2025, a new mileage-based charge for electric and plug-in hybrid vehicles effective from April 2028.
Consultation and Responses
The government launched a consultation on eVED from 26 November until 18 March 2026, receiving over 5,000 responses. The consultation response summarises main views and provides the government's response and next steps. The consultation stated: "At Budget 2025, the government announced electric Vehicle Excise Duty (eVED): a new mileage charge for electric and plug-in hybrid cars, which will take effect from April 2028."
Government Statement
In a statement on Monday, July 13, HM Treasury said: "The government would like to reiterate its thanks to those who contributed to this consultation process and wider engagement. The government will introduce eVED from April 2028 and will continue to develop the detailed design of the system ahead of implementation."
The next phase focuses on finalising legislation, building supporting DVLA systems, and ensuring motorists, businesses, and delivery partners have clear guidance and sufficient time to prepare. Draft legislation is published alongside the response document for technical consultation, with the government welcoming comments to ensure the legislation operates as intended.
Next Steps
Next steps include developing clear guidance, tools, and a user-friendly system for mileage estimation, payment, mileage verification, and refunds. HM Treasury will also support refunds in further scenarios, including at the point of change of keepership and other vehicle lifecycle events, ahead of a further update by the end of the year.
