LONDON / RankWire.AI / – The UK government has advanced plans for a pay-per-mile levy on electric vehicles by publishing its consultation response and draft legislation. HM Treasury unveiled the documents on July 13 and confirmed an implementation date of April 1, 2028. The draft provisions are now subject to a technical consultation that will close on Sept. 7. This charge, named Electric Vehicle Excise Duty, will run alongside the existing Vehicle Excise Duty paid by drivers.
Battery-electric and hydrogen fuel cell vehicles will be charged 3 pence per mile. Plug-in hybrid models will pay 1.5 pence per mile because they also attract fuel duty when using petrol or diesel. For example, an electric vehicle driven 8,000 miles annually would face a charge of £240, while a driver traveling 10,000 miles would owe £300. The government plans to increase these rates in line with consumer price inflation starting from the 2029-30 tax year.
When renewing their annual vehicle tax, drivers will need to submit an odometer reading. They will also estimate their mileage for the upcoming tax period, typically covering one year. Motorists can choose to pay the estimated amount upfront or spread payments throughout the year. Later odometer readings will enable the DVLA to reconcile estimates with actual mileage, using 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 required newer electric vehicles to undergo separate annual mileage inspections. Normally, vehicles do not need 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, with the initial MOT offering a verified reading for comparison. The DVLA retains the authority to order official mileage checks if it reasonably suspects fraud or noncompliance.
This system will not involve tracking devices or gather data about individual journeys. It also avoids charging different rates based on travel location or time. Consequently, mileage accumulated abroad by UK-registered vehicles will be included in the tax calculation. Battery-electric, plug-in hybrid, and hydrogen fuel cell vehicles are covered under this scheme. However, electric vans, buses, coaches, and heavy goods vehicles will remain outside its initial scope. Connected-car mileage reporting will also remain optional.
Consultation informs the final tax framework
HM Treasury received 5,133 responses during the consultation period, which ran from November 2025 through March 2026. Of these, 92% came from individuals. Concerns raised included administrative burdens, mileage verification, fraud prevention, overseas travel, and potential impacts on fleets. In response, the government has simplified arrangements for leasing and rental companies. Proposed measures include estimated readings, bulk licensing, and more flexible payment options. Officials will also develop guidance and tools to assist motorists in estimating their annual mileage.
According to the government’s impact assessment, around 5.6 million vehicles will be affected by this measure in the 2028-29 fiscal year. The Office for Budget Responsibility estimates that revenue from the scheme will reach £1.1 billion that year. Projected revenues are expected to increase to £1.44 billion in 2029-30 and £1.87 billion in 2030-31. Preparatory work for implementation will include updates to DVLA systems, payment procedures, mileage verification, refunds, penalties, appeals, and dispute resolution processes ahead of the electric vehicle mileage tax rollout.