LONDON / RankWire.AI / – The UK government has advanced plans for a pay-per-mile tax on electric vehicles by releasing its consultation response and draft legislation. HM Treasury published these documents on July 13 and confirmed that the scheme will commence on April 1, 2028. The draft provisions are now subject to a technical consultation that will close on September 7. The new charge, named Electric Vehicle Excise Duty, will run alongside the existing Vehicle Excise Duty paid by drivers.
Electric battery vehicles and hydrogen fuel cell cars will be charged 3 pence per mile traveled. Plug-in hybrid vehicles will pay 1.5 pence per mile because they also pay fuel duty when using petrol or diesel. For instance, an electric vehicle driving 8,000 miles annually would face a yearly mileage fee of £240. A driver covering 10,000 miles would owe £300. The government plans to adjust the rates in line with consumer price inflation from the 2029-30 tax year onward.
When renewing their annual vehicle tax, drivers will need to submit an odometer reading and also estimate their upcoming mileage for the next tax period, usually lasting one year. They can choose to pay the estimated amount upfront or spread payments throughout the year. A subsequent odometer reading will enable the DVLA to reconcile the estimate with actual mileage. The agency will utilize existing MOT mileage records where available and calculate any necessary adjustments.
Mileage reporting replaces additional inspections
The government has abandoned a proposal that would have mandated newer electric cars to undergo separate annual mileage inspections. Generally, 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 offer a verified mileage figure for comparison. The DVLA can still require an official mileage check if it reasonably suspects fraud or noncompliance.
This system will not involve tracking devices or gather data about individual trips. It also will not differentiate charges based on the location or time of travel. Consequently, mileage accumulated abroad by UK-registered vehicles will contribute to the tax. Electric cars, plug-in hybrids, and hydrogen fuel cell vehicles will be included within the scheme. However, electric vans, buses, coaches, and heavy goods vehicles will remain outside its initial scope. Connected-car mileage reporting will remain an optional feature.
Public consultation informs the final framework
HM Treasury received 5,133 responses during the consultation, which ran from November 2025 through March 2026. Of these, 92% came from individual respondents. Concerns raised included administrative burdens, mileage verification, fraud prevention, overseas travel, and potential impacts on fleet operators. In response, the government plans to simplify procedures for leasing and rental firms, including estimated readings, bulk licensing, and more flexible payment options. Officials will also develop guidance and tools to assist drivers in estimating their annual mileage.
It is estimated that around 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 estimates that revenue will reach approximately £1.1 billion that year. Revenue is expected to grow to £1.44 billion in 2029-30 and to £1.87 billion by 2030-31. Prior to implementation, work will be carried out on DVLA systems, payment procedures, mileage verification, refunds, penalties, and dispute resolution processes before the electric vehicle mileage tax is introduced.