UK’s New Electric Vehicle Pay-Per-Mile Tax: How the 2028 Charge Works
From April 2028, electric and plug-in hybrid drivers will pay a mileage-based charge. Here’s the complete breakdown of rates, how it’s collected, and what it means for your wallet.
The Budget 2025 introduced a new pay-per-mile charge for electric vehicles and plug-in hybrids, set to begin in April 2028. Electric car drivers will pay 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile, with rates increasing annually with inflation.
The government consultation describes this as creating a “fairer system for all drivers” by addressing the fact that electric vehicles currently avoid fuel duty. According to the Office for Budget Responsibility, the measure is expected to raise £1.1bn in the 2028-29 financial year, rising to £1.9bn by 2030-31, though the yield is uncertain and depends on EV adoption rates.
All new cars will be electric or plug-in hybrid from 2030, when the ban on sales of new petrol and diesel cars takes effect. Zap-Map analysis from November 2025 suggests approximately 1.7 million fully electric cars are already on UK roads, representing about 5% of the total vehicle fleet.
The tax applies to UK-registered EVs and plug-in hybrids, with mileage checked annually during MOT inspections or at registration anniversaries for newer vehicles. Payment will be integrated into the existing Vehicle Excise Duty system administered by the DVLA.
Key Facts at a Glance
Essential numbers from the Budget 2025 and government consultation
How the Pay-Per-Mile Charge Works
Drivers will pay the charge based on how many miles they drive from April 2028. Motorists will have their mileage checked annually, typically during their MOT or for new cars, around their first and second registration anniversary, according to the Treasury consultation document.
Payment will be integrated into the existing Vehicle Excise Duty system administered by the DVLA. The government has confirmed no continuous satellite or telematics tracking will be required. Mileage readings will be based on vehicle odometers, which the consultation acknowledges can be subject to tampering (“clocking”). The government recognizes the introduction of the tax may increase the likelihood of motorists choosing to clock their vehicles and is seeking views on mitigation measures.
Under the measures, an electric car driver clocking up 8,500 miles in the 2028-29 financial year is expected to pay approximately £255. According to OBR comparisons, this represents roughly half the per-mile amount petrol and diesel drivers pay in fuel duty—a result that depends on assumptions about fuel prices and vehicle fuel economy.
The charge applies to UK-registered vehicles. The consultation seeks views on how miles driven abroad should be treated in practice, raising practical questions for drivers who spend significant time outside the UK, particularly Northern Ireland residents who frequently cross the border into the Republic of Ireland. EVs registered abroad but driven in the UK are exempt from the charge.
Calculate Your Annual EV Tax
Adjust your annual mileage to see how the new pay-per-mile charge will affect your costs
Other Electric Vehicle Tax Changes
The pay-per-mile charge is being introduced alongside other taxation changes affecting electric vehicles. On 1 April 2025, Vehicle Excise Duty became payable on EVs for the first time. For new cars, the payment in the first year is £10, rising to the standard rate of £195 in the second year. Electric cars registered between April 2017 and March 2025 pay £195 from the start.
From 1 April 2025, some EVs became liable for the Vehicle Excise Duty “expensive car supplement.” The government has confirmed that the threshold for zero-emission vehicles will rise to £50,000, with the change taking effect from 1 April 2026.
From 2 January 2026, zero-emission cars will lose full exemption from the London congestion charge. Transport for London confirmed a 25% Auto Pay discount will apply to eligible electric cars, making the discounted daily charge £13.50 for EVs registered on Auto Pay.
In July 2025, the government introduced the Electric Car Grant scheme, offering grants of up to £3,750 for eligible models priced at £37,000 or below, with an initial fund of £650m. An additional £1.3bn of funding was announced in Budget 2025.
Timeline: When Tax Changes Take Effect
Key dates for electric vehicle taxation and the 2030 transition
EV Market and Infrastructure Context
UK sales of new fully electric cars have been growing. SMMT data shows the number registered rose from 29,800 in October 2024 to 36,800 in October 2025, equivalent to a quarter of new car registrations. In October 2025, approximately 73% of new electric cars were bought by businesses or for fleets, with 27% registered to private buyers.
The range of electric cars has improved, as has the number of public charge points, though concerns remain about distribution. Zap-Map data shows almost 87,000 public charging devices across the UK in approximately 44,000 locations, including places like supermarket car parks and lamppost chargers.
A report by the Public Accounts Committee said availability on motorways was still “patchy” and noted that “too few have been installed outside of the South East and London, which currently host 43% of all charge points.” The government announced a further £200m investment for speeding up the rollout of charge points in Budget 2025.
Charging costs vary significantly. Industry data from RAC Charge Watch and Zap-Map show typical home charging estimates used in public analysis are in the single-digit pence per mile range, while some rapid and ultra-rapid public charging prices reach mid-20p per mile in sampled months. Domestic electricity supplies used for home charging are typically subject to the reduced VAT rate available for qualifying domestic energy supplies (commonly 5% for qualifying uses), while electricity supplied at public charge points is generally standard-rated VAT at 20%.
Tax Comparison Across Vehicle Types
How the new charges compare for different vehicles (based on 8,500 annual miles)
| Vehicle Type | Per-Mile Rate (2028) | Annual Cost (8,500 miles) | Additional VED/Costs |
|---|---|---|---|
| ⚡ Battery Electric Vehicle (BEV) | 3p | £255 | £195/year VED |
| 🔌 Plug-in Hybrid (PHEV) | 1.5p | £128 | £195/year VED |
| ⛽ Petrol Vehicle | ~6p (fuel duty equiv.) | £510 (approx.) | £195/year VED |
| 🛢️ Diesel Vehicle | ~6p (fuel duty equiv.) | £510 (approx.) | £195/year VED |
| 💎 Luxury EV (>£50k from Apr 2026) | 3p | £255 | £195 + expensive car supplement |
Frequently Asked Questions
Answers to common questions about the new pay-per-mile charge
Industry and Expert Reactions
Car manufacturer Ford and the Society of Motor Manufacturers and Traders industry body both described the new tax as “the wrong measure at the wrong time.” Ford stated the Budget conveyed “a confusing message” in the government’s attempt to encourage motorists to switch to electric vehicles.
The SMMT welcomed the government’s pledge to invest £1.3bn to encourage EV use through the Electric Car Grant extension but warned the pay-per-mile charge would “undermine demand” at a critical time for meeting the 2030 targets.
Delvin Lane, chief executive of InstaVolt which develops and installs chargers, said the tax could discourage people from switching to electric cars. He noted drivers without home chargers were already paying more in tax for public charging, and that rural and low-income drivers would be disproportionately affected. “We urge the government to work closely with the charging and automotive sectors to co-design a fair, future-proof system that maintains incentives to switch to zero-emission vehicles while ensuring sustainable road taxation,” he stated.
Edmund King, president of the AA, commented: “The Budget has put drivers at a fork in the road with the chancellor announcing major tax proposals for EV owners. Drivers fully understand that the government needs to get the balance right between raising cash for roads investment, whilst ensuring it doesn’t slow down the transition to electric cars in order to meet environmental targets.”
Some policy experts and transport academics have pointed out that electricity taxation could better capture external costs such as vehicle weight and efficiency. However, the government consultation notes the administrative challenges of implementing uniform electricity taxation given the current VAT structure differences between home and public charging.
Key Takeaways
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The pay-per-mile charge begins in April 2028, with rates of 3p for electric vehicles and 1.5p for plug-in hybrids, checked annually at MOT or registration anniversaries. Rates will increase with inflation each year.
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At typical mileage (8,500 miles per year), EV drivers will pay approximately £255 annually. According to OBR comparisons, this represents roughly half the per-mile amount petrol and diesel drivers pay in fuel duty—a result that depends on assumptions about fuel prices and vehicle economy.
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The draft policy applies to UK-registered vehicles; the consultation is seeking views on how to treat miles driven abroad, raising practical questions for cross-border drivers, particularly in Northern Ireland.
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Industry data (RAC and Zap-Map) show wide variation in charging costs: typical home charging estimates are in the single-digit pence per mile range, while some rapid and ultra-rapid public charging prices reach mid-20p per mile, creating potential inequality for those without home charging access.
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The government expects the measure to raise about £1.1bn in 2028-29, rising to £1.9bn by 2030-31 according to OBR projections, though the yield is uncertain and depends on actual EV adoption rates.
Summary
The Budget 2025 announced a new mileage charge for UK-registered electric and plug-in hybrid cars, set at 3p and 1.5p per mile respectively from April 2028. Collection will be integrated into Vehicle Excise Duty with mileage checked annually. The OBR’s yield estimates and the government’s consultation documents were provided as primary sources.
The policy is part of a broader transition as the UK moves toward the 2030 ban on new petrol and diesel car sales. Additional context on charging infrastructure, VED changes, and the Electric Car Grant scheme was discussed. The consultation period runs until March 2026, allowing stakeholders to provide feedback on implementation details including cross-border mileage treatment and verification methods.
