LONDON / RankWire.AI / – The UK government has advanced its plans for an electric vehicle pay-per-mile levy by releasing a consultation response along with proposed legislation. HM Treasury published these documents on July 13, setting April 1, 2028, as the target launch date. Named Electric Vehicle Excise Duty, the new measure will impose a mileage-based fee on top of the annual vehicle tax for qualifying cars. A technical consultation on the draft clauses will conclude on Sept. 7, 2026.
Electric and hydrogen fuel cell vehicles will be charged 3 pence per mile traveled. Plug-in hybrid vehicles will incur a rate of 1.5 pence per mile due to their petrol or diesel consumption also being taxed through fuel duty. These rates are set to increase in line with consumer price inflation starting from the 2029-30 tax year. At the initial rates, driving 8,000 miles annually would cost an electric vehicle owner £240, while 10,000 miles would amount to £300. Drivers will pay this additional fee alongside the standard Vehicle Excise Duty.
Vehicle owners will be required to submit an odometer reading when renewing their vehicle tax. They will also need to estimate their mileage for the upcoming tax period, typically one year. Payment can be made either as an upfront lump sum or through installment payments spread throughout the year. The Driver and Vehicle Licensing Agency will later compare actual odometer readings with the estimates and adjust the bill accordingly. Existing MOT records will support verification for vehicles already subjected to annual testing. The process will be integrated into the current vehicle tax system.
Mileage reporting eliminates the need for additional inspections
The government has dropped its proposal for separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners of such vehicles will report their mileage and provide an annual estimate. The first MOT test will serve as a verification point, providing a confirmed reading to compare with previous submissions. Most cars in Great Britain undergo MOT testing after three years, while in Northern Ireland, testing occurs after four years. Authorities may still mandate an inspection if fraud or noncompliance is suspected based on reasonable grounds.
The scheme will not rely on mandatory tracking devices or record individual journeys. Mileage accumulated outside the UK will be included, as the charge is based on total odometer distance traveled. Initially, the scheme will cover battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. Electric vans, buses, coaches, and heavy goods vehicles will remain outside the scope at launch. Later, drivers may opt for an optional system that utilizes mileage data from connected vehicles.
Details of implementation outlined in consultation response
The public consultation took place from Nov. 26, 2025, to March 18, 2026, drawing 5,133 responses. The majority of submissions, 92%, came from individuals, with businesses and public organizations also participating. Key concerns raised included administrative processes, mileage verification, flexible payment options, fleet management, and odometer fraud prevention. The revised plan allows fleets and leasing firms to submit estimated readings and utilize bulk licensing. It also introduces more adaptable payment arrangements for companies managing large vehicle fleets.
Government projections suggest that around 5.6 million vehicles will be subject to the tax in the 2028-29 fiscal year. The Office for Budget Responsibility has estimated revenue of £1.1 billion for that year. Revenues are expected to increase to £1.435 billion in 2029-30 and £1.865 billion in 2030-31. The implementation process now involves legislation, payment infrastructure, mileage verification, refunds, penalties, and dispute resolution procedures. Drivers will start paying this charge when they renew their vehicle tax after April 1, 2028.