LONDON / RankWire.AI / – The UK government has advanced its plans for a pay-per-mile tax on electric vehicles by releasing its consultation feedback and draft legislation. HM Treasury published these documents on July 13, and set April 1, 2028, as the anticipated start date. Named Electric Vehicle Excise Duty, the measure will introduce a mileage-based charge in addition to the annual tax already levied on qualifying vehicles. A technical consultation on the proposed clauses will conclude on Sept. 7, 2026.
Drivers of battery-electric and hydrogen fuel cell cars will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile, as they also incur fuel duty through petrol or diesel use. These rates are set to increase with consumer price inflation starting from the 2029-30 tax year. At the initial rates, covering 8,000 miles would cost electric car owners £240 annually, while 10,000 miles would amount to £300. This mileage fee will be added on top of the existing Vehicle Excise Duty.
Vehicle owners will be required to submit an odometer reading when renewing their vehicle tax. They will also need to estimate their upcoming mileage for the next tax period, typically one year. Payments can be made either upfront based on this estimate or spread across the year. The Driver and Vehicle Licensing Agency will later compare actual odometer readings with the estimates to determine any adjustments. Existing MOT records will help verify readings for vehicles already subject to annual testing. The process will operate within the current vehicle tax framework.
Mileage reporting eliminates the need for additional inspections
The government has dropped its plan for separate mileage checks on vehicles that have not reached the MOT age requirement. Owners of such vehicles will report their mileage and provide an annual estimate instead. The first MOT will serve as a verified reading for comparison with previous submissions. In Great Britain, most cars undergo MOT testing after three years, while in Northern Ireland, the threshold is four years. Authorities may still order checks if fraud or noncompliance is suspected.
The scheme will not involve mandatory tracking devices or the recording of individual journeys. The total odometer distance traveled outside the UK will count, as the charge applies to overall mileage. Initially, battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles will be included. Electric vans, buses, coaches, and heavy goods vehicles are not part of the scheme at launch. Drivers may later opt into an optional system that collects mileage data from connected vehicles.
Details of implementation outlined in consultation feedback
The consultation period ran from Nov. 26, 2025, to March 18, 2026, receiving 5,133 responses. Most submissions, 92%, came from individuals, with businesses and public entities also participating. Concerns raised included administrative procedures, mileage verification, payment options, fleet management, and potential odometer fraud. The revised plan allows fleets and leasing companies to utilize estimated readings and bulk licensing, offering more flexible payment options for large vehicle operators.
Government forecasts indicate that about 5.6 million vehicles will be subject to this tax in the 2028-29 fiscal year. The Office for Budget Responsibility has estimated revenue at £1.1 billion for that year. Revenues are projected to increase to £1.435 billion in 2029-30 and reach £1.865 billion by 2030-31. The implementation process now includes legislation, payment infrastructure, mileage verification, refunds, penalties, and dispute resolution procedures. Motorists will start paying the charge when renewing their vehicle tax after April 1, 2028.