Rachel Reeves declares 3p tax beginning April 2028 for one group of highway customers
Chancellor Rachel Reeves has confirmed a new pay-per-mile levy on electric vehicles and plug-in hybrids starting April 2028, with EVs taxed at 3p per mile and hybrids at 1.5p per mile
She’s brought in a new tax(Image: inyourArea)
A new tax will target owners of specific vehicles based on their mileage, it has been confirmed. Chancellor Rachel Reeves has issued the roll-out of a new pay-per-mile charge for electric car owners.
Owners of certain models will be taxed at 3p per mile. Therefore, someone covering 5,000 miles in a year would face a £150 fee, which will continue to rise with additional mileage.
Given that most UK drivers travel further than this over a 12-month period, they will have to fork out more, Birmingham Live reports, reports Nottinghamshire Live.
The pay-per-mile charge will apply to owners of electric vehicles (EVs) and plug-in hybrids. EVs will be taxed at the 3p per mile rate, whilst hybrids will be charged at 1.5p per mile.
The Government is launching the new tax, officially named the electric vehicle excise duty (eVED), set to come into force in April 2028, to offset fuel duty losses in recent years due to the transition towards electric vehicles.
Ministers argue that the overhaul will ensure a fairer system where everyone contributes. The average driver, covering 8,000 miles a year, would shell out £255.
This represents another blow for EV owners, following last year’s introduction of vehicle tax for the first time. They were previously exempt from this levy.
Treasury minister Dan Tomlinson clarified: “At Autumn Budget 2025, the Government announced the introduction of electric vehicle excise duty (eVED), a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028.
“Drivers will pay for their mileage alongside their existing vehicle excise duty (VED).”
A consultation document reveals: “It will be set at half of the equivalent rate of fuel duty for electric cars, and half again for plug-in hybrid cars.
“eVED will ensure all car drivers contribute, but will still maintain important incentives to switch to an electric vehicle.”
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