LONDON / RankWire.AI / – The UK government has advanced its plans for a pay-per-mile tax on electric vehicles by releasing the consultation response and draft legislation. HM Treasury published these documents on July 13, designating April 1, 2028, as the planned start date. Named Electric Vehicle Excise Duty, the measure will impose a mileage-based fee in addition to the annual tax already levied on qualifying vehicles. A technical consultation on the draft clauses will close on Sept. 7, 2026.
Electric cars powered by batteries and hydrogen fuel cell vehicles will be charged 3 pence per mile. Plug-in hybrid vehicles will incur a rate of 1.5 pence per mile because their petrol or diesel engines also attract fuel duty. These rates are expected to increase with consumer price inflation starting from the 2029-30 tax year. At the initial rates, driving 8,000 miles would cost an electric vehicle owner £240 annually, while 10,000 miles would amount to £300. This additional fee will be paid alongside the standard Vehicle Excise Duty.
Vehicle owners will report their odometer readings during tax renewal and estimate their mileage for the upcoming period, usually one year. Payments can be made either upfront based on the estimate or spread throughout the year. The Driver and Vehicle Licensing Agency will later compare the actual readings with the estimates to determine any balance owed. For vehicles already undergoing annual MOT testing, existing records will help verify mileage. The process will be integrated into the current vehicle tax system.
Mileage reporting prevents extra inspections
The government has dropped its plan for separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners will report their mileage and provide an annual estimate. The first MOT will offer a verified reading for comparison with previous submissions. Most cars in Great Britain undergo MOT testing after three years, while Northern Ireland does so after four years. Authorities may still require checks if there is reasonable suspicion of fraud or noncompliance.
This scheme will not rely on mandatory tracking devices or record individual journeys. Mileage accumulated outside the UK will also be counted since the charge is based on total odometer distance. Initially, the scheme includes battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. Electric vans, buses, coaches, and heavy goods vehicles are not included at launch. Later, drivers might opt into an optional system that uses mileage data from connected vehicles.
Details of implementation outlined in consultation response
The consultation period ran from Nov. 26, 2025, through March 18, 2026, receiving 5,133 responses. Of these, 92% were from individuals, with the remainder from businesses and public authorities. Feedback highlighted concerns about administration, mileage verification, flexible payment options, fleet management, and odometer fraud. The revised plan allows fleets and leasing firms to submit estimated readings and utilize bulk licensing. It also introduces more adaptable payment options for companies managing large vehicle fleets.
Government projections indicate that about 5.6 million vehicles will be covered by the tax during the 2028-29 fiscal year. The Office for Budget Responsibility has validated revenue estimates of £1.1 billion for that year. By 2029-30, revenue is expected to reach £1.435 billion, rising further to £1.865 billion in 2030-31. The implementation phase now includes legislation, payment processing systems, mileage verification, refunds, penalties, and dispute procedures. Drivers will start paying the tax when they renew their vehicle registration after April 1, 2028.