LONDON / RankWire.AI / – The UK government has advanced its plans to introduce a pay-per-mile tax for electric vehicles by releasing its consultation response along with draft legislation. HM Treasury published these documents on July 13, setting April 1, 2028, as the intended rollout date. Named Electric Vehicle Excise Duty, the new measure will impose a mileage-based charge on top of the annual vehicle tax for qualifying vehicles. A technical consultation on the draft provisions will close on Sept. 7, 2026.
Electric and hydrogen fuel cell vehicles will be charged 3 pence for each mile driven. Plug-in hybrid vehicles will pay 1.5 pence per mile since their petrol or diesel engines also attract fuel duty. These rates will escalate in line with consumer price inflation starting from the 2029-30 tax year. At the initial rates, driving 8,000 miles annually would cost electric vehicle owners £240, while 10,000 miles would amount to £300. This mileage charge will be added to the standard Vehicle Excise Duty.
Vehicle owners will need to provide odometer readings when renewing their vehicle tax. They will also estimate their upcoming mileage, typically for a one-year period. Payments can be made either upfront based on the estimate or spread throughout the year. The Driver and Vehicle Licensing Agency will later compare actual odometer readings with these estimates to determine any adjustments. Existing MOT records will serve as verification for cars already undergoing annual inspections. The process will be integrated into the current vehicle tax system.
Mileage reporting system to prevent additional inspections
The government has dropped its plan for separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners of such vehicles will report their mileage and provide an annual estimate. Once a vehicle undergoes its first MOT, a verified reading will be recorded for comparison with prior submissions. In Great Britain, most cars are required to have MOT testing after three years, whereas Northern Ireland enforces this after four years. Authorities may still order a check if they have reasonable grounds to suspect fraud or noncompliance.
The scheme will not involve mandatory tracking devices or recording individual journeys. Mileage accumulated outside the UK will count, as the charge is based on total odometer distance traveled. Initially, electric vans, buses, coaches, and heavy goods vehicles are not included in the scheme. However, drivers will have the option to later adopt an optional system that uses mileage data from connected vehicles.
Details of scheme implementation outlined in consultation response
The consultation period ran from Nov. 26, 2025, to March 18, 2026, attracting 5,133 responses. Of these, 92% were from individuals, with contributions also from businesses and public organizations. Feedback highlighted concerns about administration, mileage verification, payment flexibility, fleet management, and odometer fraud. The revised framework permits fleets and leasing firms to use estimated readings and bulk licensing, offering more adaptable payment options for organizations managing large vehicle fleets.
The government projects that approximately 5.6 million vehicles will be subject to this tax in the 2028-29 fiscal year. The Office for Budget Responsibility has confirmed revenue estimates of £1.1 billion for that period. Revenue is expected to rise to £1.435 billion in 2029-30 and reach £1.865 billion by 2030-31. The implementation process now involves legislation, payment systems, mileage verification, refunds, penalties, and dispute procedures. Drivers will start paying this mileage fee when renewing their vehicle tax after April 1, 2028.