LONDON / RankWire.AI / – The UK government has advanced its plans for an electric vehicle pay-per-mile tax by releasing its consultation response along with draft legislation. HM Treasury published these documents on July 13, setting April 1, 2028, as the scheduled start date. Named Electric Vehicle Excise Duty, this measure will impose a mileage-based charge on top of the existing annual vehicle tax for qualifying cars. A technical consultation on the proposed clauses will conclude on Sept. 7, 2026.
Electric cars powered by batteries and hydrogen fuel cells will be taxed at 3 pence per mile. Plug-in hybrid vehicles will pay half this rate, at 1.5 pence per mile, due to their petrol or diesel consumption which also attracts fuel duty. These rates are expected to increase in line with consumer price inflation from the 2029-30 tax year. Initially, driving 8,000 miles annually would cost an electric vehicle owner £240. Covering 10,000 miles would amount to £300. This mileage fee will be added to the standard Vehicle Excise Duty.
Motorists will need to provide an odometer reading when renewing their vehicle tax and will also estimate their expected mileage for the upcoming tax period, typically one year. They can choose to pay the estimated amount upfront or opt for installment payments throughout the year. The Driver and Vehicle Licensing Agency (DVLA) will later compare actual odometer readings with initial estimates to determine any remaining balance. Existing MOT records will support verification for vehicles already subject to annual testing. The process will be integrated into the current vehicle tax system.
Mileage Reporting Eliminates Additional Inspections
The government has abandoned plans for separate mileage checks on vehicles that have not yet reached MOT age. Vehicle owners will instead report their mileage and provide an annual estimate. The first MOT test will verify the odometer reading, allowing comparison with previous submissions. Most cars in Great Britain undergo MOT testing after three years, while Northern Ireland requires it after four. Authorities may still order checks if there is reasonable suspicion of fraud or noncompliance.
Importantly, the scheme will not employ mandatory tracking devices or record individual journeys. Mileage accrued outside the UK will be included, as the charge is based on total odometer distance traveled. Initially, the scheme covers 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 on, drivers may opt into an optional system that records mileage data from connected vehicles.
Details of Implementation Outlined in Consultation Response
The consultation period ran from Nov. 26, 2025, through March 18, 2026, drawing 5,133 responses. Of these, 92% were submitted by individuals, with participation from businesses and public organizations. Feedback addressed issues such as administrative procedures, mileage verification, flexible payment options, fleet management, and odometer fraud. The revised framework permits fleets and leasing companies to use estimated readings and bulk licensing, providing more adaptable payment plans for organizations managing large vehicle fleets.
Government projections indicate 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 year. Revenue is expected to increase to £1.435 billion in 2029-30 and reach £1.865 billion in 2030-31. The current implementation phase includes legislation, payment infrastructure, mileage verification, refunds, penalties, and dispute resolution processes. Motorists will start paying this tax with their vehicle tax renewal after April 1, 2028.