LONDON / RankWire.AI / – The UK government has advanced its plans for implementing 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 confirmed an April 1, 2028, commencement date. The draft clauses are now undergoing a technical consultation that will close on Sept. 7. The new charge, named Electric Vehicle Excise Duty, will be levied alongside the existing Vehicle Excise Duty that motorists already pay.
Battery-electric and hydrogen fuel cell vehicles will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile because they also attract fuel duty when using petrol or diesel. An electric vehicle driving 8,000 miles annually would incur a mileage fee of £240, while a driver covering 10,000 miles would face a charge of £300. The government plans to increase the rates in line with consumer price inflation starting from the 2029-30 tax year.
Motorists will need to submit an odometer reading when renewing their vehicle tax each year. They will also estimate their expected mileage for the upcoming tax period, generally lasting one year. Payments can be made upfront based on estimates or divided into installments throughout the year. Later odometer readings will enable the DVLA to reconcile estimated mileage with actual figures. The agency will utilize existing MOT mileage data where available and calculate any adjustments needed.
Mileage submission replaces additional inspections
The government has abandoned a previous proposal requiring newer electric cars to undergo separate annual mileage inspections. Typically, vehicles do not require an MOT during their first three years, or four years in Northern Ireland. Instead, owners will report mileage and provide estimates at each tax renewal. The initial MOT will serve as a verified milestone for comparison. The DVLA can still order official mileage checks if there are reasonable suspicions of fraud or noncompliance.
This system will not depend on tracking devices nor will it gather information about individual trips. It also avoids differential rates based on travel location or time. Consequently, mileage accumulated abroad by UK-registered vehicles will count towards the tax. The scheme covers battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles. However, electric vans, buses, coaches, and heavy goods vehicles will remain outside its initial scope. Connected-car mileage reporting will continue to be optional.
Final tax structure shaped by public consultation
During the consultation period from November 2025 through March 2026, the HM Treasury received 5,133 responses. Of these, 92% were from individuals. Concerns raised included administrative burden, mileage verification, potential fraud, international travel, and impacts on fleet operators. In response, the government has simplified procedures for leasing and rental firms. Upcoming measures include estimated readings, bulk licensing, and more adaptable payment options. Officials will also develop guidance and tools to assist drivers in estimating their annual mileage.
According to the government’s impact assessment, around 5.6 million vehicles will be affected in the 2028-29 fiscal year. Revenue estimates, certified by the Office for Budget Responsibility, project income of £1.1 billion for that year. Revenue is expected to increase to £1.44 billion in 2029-30 and reach £1.87 billion in 2030-31. Before the electric vehicle mileage tax is implemented, work will focus on updating DVLA systems, establishing payment protocols, mileage verification procedures, refunds, penalties, and dispute resolution processes.