LONDON / RankWire.AI / – The UK government has advanced plans for a pay-per-mile tax on electric cars by publishing its consultation response and draft legislation. HM Treasury released the documents on July 13 and confirmed an April 1, 2028, start date. The draft clauses now face a technical consultation that closes Sept. 7. The charge, called Electric Vehicle Excise Duty, will operate alongside the existing Vehicle Excise Duty paid by motorists.
Battery-electric and hydrogen fuel cell cars will pay 3 pence for every mile traveled. Plug-in hybrid cars will pay 1.5 pence per mile because they also incur fuel duty when using petrol or diesel. An electric car covering 8,000 miles would face an annual mileage charge of £240. A driver covering 10,000 miles would pay £300. The government will increase the rates with consumer price inflation from the 2029-30 tax year.
Drivers will provide an odometer reading when renewing their annual vehicle tax. They will also estimate their mileage for the coming tax period, which will usually cover one year. Motorists can pay the estimated charge upfront or spread payments across the year. A later odometer reading will allow the DVLA to reconcile the estimate with actual mileage. The agency will use existing MOT mileage records where available and calculate any balancing payment.
Mileage reporting replaces extra checks
The government has dropped a proposal that would have required newer electric cars to attend separate annual mileage inspections. Cars generally do not need an MOT during their first three years, or four years in Northern Ireland. Their keepers will instead report mileage and provide estimates at each tax renewal. The first MOT will supply a verified reading for comparison. The DVLA can still order an official mileage check when it reasonably suspects fraud or noncompliance.
The system will not require tracking devices or collect information about individual journeys. It will also avoid charging different rates based on where or when a car travels. As a result, mileage accumulated abroad by UK-registered cars will count toward the tax. Battery-electric cars, plug-in hybrids and hydrogen fuel cell cars fall within the scheme. Electric vans, buses, coaches and heavy goods vehicles will remain outside its initial scope. Connected-car mileage reporting will remain optional.
Consultation shapes final tax system
HM Treasury received 5,133 responses during the consultation, which ran from November 2025 through March 2026. Individuals submitted 92% of those responses. Participants raised concerns about administrative work, mileage verification, fraud, overseas travel and the possible burden on fleets. The government responded by simplifying arrangements for leasing and rental companies. Planned measures include estimated readings, bulk licensing and more flexible payments. Officials will also prepare guidance and tools to help motorists estimate annual mileage.
The measure will affect about 5.6 million vehicles in the 2028-29 financial year, according to the government’s impact assessment. The Office for Budget Responsibility certified estimates showing revenue of £1.1 billion that year. Receipts are projected to rise to £1.44 billion in 2029-30 and £1.87 billion in 2030-31. Implementation work will cover DVLA systems, payment rules, mileage checks, refunds, penalties, appeals and dispute procedures before the electric vehicle mileage tax begins.