Pay-per-mile car tax on EVs a ‘strategic mistake’
The government has been urged to ‘tread carefully’ if it presses forward with plans to impose a pay-per-mile car tax on electric vehicle drivers.
It’s been reported that a new pay-per-mile tax for electric vehicle drivers will be proposed in the Autumn Budget.
Following a consultation, the tax would come into force in April 2028, with drivers expected to set and then declare their annual mileage. Those covering 12,000 miles a year would face an additional £300 in annual car tax.
However, with the industry already struggling to meet ZEV Mandate targets and sales of electric cars to private buyers tepid, industry bodies have warned that an additional tax could cool sales still further.
The wrong measure
The Society of Motor Manufacturers and Traders said: “We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK’s EV transition, this would be entirely the wrong measure at the wrong time.
“Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake – deterring consumers and further undermining industry’s ability to meet ZEV mandate targets, with significant ramifications for perceptions of the UK as a place to invest.
“A smarter, fair and future-ready taxation system requires a fundamental rethink, one that must be done in full partnership with the industry and other stakeholders.”
Poll tax on wheels
Meanwhile, AA president Edmund King said: “Whilst we acknowledge the Treasury is losing fuel duty revenue as drivers go electric, the government has to tread carefully unless their actions slow down the transition to EVs.
“The ZEV Mandate for 28% of new car sales to be zero emissions this year will not be met as sales are running at just 22%. We need to see the detail of this proposal to ascertain whether these new taxes will be equitable or a poll tax on wheels.”
