LONDON / RankWire.AI / – The UK government has advanced its plans to introduce a pay-per-mile charge on electric vehicles by publishing its consultation response and draft legislation. HM Treasury made the documents available on July 13 and confirmed an effective date of April 1, 2028. The draft provisions now proceed to a technical consultation that will close on September 7. This fee, named Electric Vehicle Excise Duty, will run alongside the current Vehicle Excise Duty that drivers already pay.
Battery-electric and hydrogen fuel cell vehicles will be charged 3 pence per mile traveled. Plug-in hybrid vehicles will be charged 1.5 pence per mile because they also pay fuel duty when using petrol or diesel. For example, an electric vehicle driven 8,000 miles annually would face a charge of £240. A driver covering 10,000 miles would pay £300. The government plans to adjust these rates in line with consumer price inflation from the 2029-30 tax year onward.
Motorists will be required to provide an odometer reading when renewing their annual vehicle tax. They will also need to estimate their mileage for the upcoming tax period, which typically spans one year. Payments can be made either upfront based on the estimate or spread throughout the year. When a new odometer reading is provided later, the DVLA will reconcile this with the initial estimate, using existing MOT mileage records where available, and will calculate any necessary adjustments.
Mileage reporting replaces additional inspections
The government has abandoned a proposal requiring newer electric cars to undergo separate annual mileage inspections. Generally, vehicles do not need an MOT during their first three years, or four years in Northern Ireland. Instead, owners will report mileage and submit estimates during each tax renewal. The initial MOT will provide a verified mileage reading for comparison. The DVLA may still conduct official mileage checks if it suspects fraud or noncompliance.
This system will not involve tracking devices or collect data about individual trips. It also avoids differential rates based on travel location or time. Consequently, mileage accrued abroad by UK-registered vehicles will count toward the tax. The scheme will include battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. However, electric vans, buses, coaches, and heavy goods vehicles will initially be excluded. Connected-car mileage reporting will remain optional.
Consultation Influences the Final Design of the Tax
HM Treasury received 5,133 responses during the consultation period, which ran from November 2025 through March 2026. Of these, 92% were from individuals. Feedback highlighted concerns about administrative burdens, mileage verification, potential fraud, overseas travel, and impacts on fleet operators. In response, the government has simplified procedures for leasing and rental companies. Proposed measures include estimated readings, bulk licensing, and more flexible payment options. Officials will also develop guidance and tools to aid drivers in estimating their annual mileage.
It is estimated that approximately 5.6 million vehicles will be affected by this measure in the 2028-29 fiscal year, according to the government’s impact assessment. The Office for Budget Responsibility projects revenue of £1.1 billion for that year. Revenue is expected to increase to £1.44 billion in 2029-30 and reach £1.87 billion by 2030-31. Preparations for implementation will include updates to DVLA systems, payment regulations, mileage verification processes, refunds, penalties, appeals, and dispute resolution procedures before the electric vehicle mileage tax is introduced.