Pay-per-mile road tax for EVs on the cards
The government is expected to announce a new pay-per-mile road tax for electric vehicles in the Autumn Budget on 26 November.
Under the new scheme, electric vehicle drivers would be expected to pay 3p per mile on top of any existing road taxes. For motorists recording an annual mileage of 12,000 miles, that would equate to £300 in additional tax.
This comes after road tax of £195 was applied to newly-registered electric vehicles in April, in addition to the ‘expensive car supplement’ of £425 for vehicles valued at more than £40,000.
The electric vehicle tax is expected to be introduced in April 2028 following a consultation with industry stakeholders that will be launched after the Budget, with estimates suggesting it could raise £1.8bn by 2031.
However, the Electric Car Scheme has warned that pay-per-mile tax could pose significant challenges around GDPR compliance and individual privacy rights, and it also said that it could disproportionately impact motorists in rural areas, remote workers, and low-income drivers who can’t afford to live near their employer.
Fuel duty
Meanwhile, it is also expected that Chancellor Rachel Reeves will announce that the 5p fuel duty cut will not be extended from April 2026.
Gordon Balmer, executive director of the Petrol Retailers Association, said:
“With inflation putting pressure on business, the last thing we need is a rise in fuel duty. We urge the Chancellor to commit to a full freeze on fuel duty and make the 5p-per-litre rebate permanent in the upcoming Budget.”
