EV Drivers Face New Pay-Per-Mile Tax from 2028 – Here’s What it Means

Electric vehicle owners are set for a significant shake-up in how they’re taxed, as the Government plans to introduce a pay-per-mile charge on EVs from April 2028. The new fee, 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrids, will be added on top of existing road tax and tracked via annual MOT mileage readings.

Government Officials claim the average EV driver will pay around £240 extra per year, but is it a blow to the EV market. With electric models still carrying much higher price tags than petrol and diesel equivalents, critics argue the new charge will make the switch to electric even less appealing.

The new system, known as the electric vehicle excise duty (eVED), will work like this:

• Drivers will report mileage annually through DVLA when renewing VED.
• For new cars, dealerships may prepay mileage and bundle it into the vehicle price.
• Owners of existing EVs will estimate annual mileage at renewal, and an estimated charge will be applied.
• Vans, buses, motorcycles, coaches and HGVs will be exempt at first.
• The expensive car supplement threshold for new EVs will rise from £40,000 to £50,000 in April 2026.

Industry analysts warn the move could crush demand for EVs just as the UK needs adoption to accelerate.

A public consultation on the new system is now open, with an online survey available and responses due by 18 March 2026. If you’re unsure how these changes might affect your business or future vehicle choices, contact our team today, we’re here to help you make an informed decision.