Motorists who drive electric vehicles will be charged a new tax based on how far they travel, including journeys taken outside the UK, under government plans confirmed this week.
The scheme, known as eVED, is due to come into force in April 2028. Under the plan, EV owners will pay 3p for every mile driven, while plug-in hybrid drivers will be charged 1.5p a mile.
The government estimates a typical electric car driver will pay around £240 a year once the charge is introduced, with about six million EV owners expected to be affected by the time it takes effect.
Overseas Driving Included
One of the more debated aspects of the scheme is that it will apply to mileage driven abroad as well as at home. In a consultation response published on Monday, the government said that exempting foreign travel would have required the use of location data to track where vehicles were being driven, which it said raised privacy concerns. Officials also noted that only around 2 percent of the total distance covered by UK cars each year takes place overseas.
Even so, some industry figures have questioned the approach. Ben Nelmes, of the consultancy New AutoMotive, said it was “absurd” that families driving abroad would still be taxed by the UK government. He gave the example of a family travelling from Calais to the ski resort of Val d’Isère in France, who would face a bill of around £37.50 despite not driving on any UK roads during the trip.
Background to the Policy
Chancellor Rachel Reeves first announced the tax in the Budget last November. The government has said the change is designed to ensure electric vehicle owners contribute fairly to the cost of maintaining the road network, as revenue from fuel duty declines with the shift away from petrol and diesel cars. Drivers of conventional fuel vehicles currently pay an average of about £600 a year in fuel duty.
Officials expect the scheme to raise £1.1 billion in its first year, 2028-29, rising to £1.9 billion by 2030-31.
How the Charge Will Work
Drivers will be set an estimated annual mileage figure in advance. If they travel less than expected, the difference will be carried over as a credit for the following year; if they travel more, they will be charged extra. However, the government has acknowledged that the DVLA’s current computer systems will not be able to process automatic refunds for drivers who overpay when the scheme first launches.
An earlier proposal requiring independent mileage checks on EVs less than three years old has been dropped. Instead, drivers of newer vehicles will be asked to self-report their mileage until their first MOT is due.
Mixed Reaction
Mr Nelmes welcomed the decision to scrap mandatory mileage checks but said other parts of the scheme remained “untested” and called on ministers to reconsider aspects of the policy before it is introduced.
The government has said that 80 percent of the revenue raised through the tax will go towards £7.5 billion of measures to support the take-up of electric vehicles, including grants of up to £3,750 for buyers of new EVs, which were introduced last summer.
The Department for Transport said the changes had been designed so that EV and plug-in hybrid drivers continue to pay less overall than they would through equivalent fuel duty, and that it remained committed to supporting the shift to electric vehicles.
