The game is changing for UK drivers, especially those behind the wheel of electric vehicles (EVs). As petrol and diesel revenues from fuel duty dry up, the government plans to roll out a pay-per-mile tax to balance the books and keep the roads funded.
Starting around 2028, EV owners will be charged around 3p per mile traveled, on top of their existing Vehicle Excise Duty (VED). Average EV drivers, covering roughly 8,900 miles a year, could see bills approaching £250-£280 annually just for road usage. Hybrid owners won't escape either they'll pay a slightly lower rate reflecting their partial petrol use.
Drivers will estimate their annual mileage, pay upfront alongside their VED, then settle any differences yearly. Go over your estimate, expect a top-up charge; drive less, get credit. The scheme avoids intrusive GPS monitoring while aiming for fairness.
Why the shift? Petrol and diesel drivers currently shoulder about £600 a year in fuel duty. EVs, which until recently paid no road tax, now chip in, but it's still not enough. As electric wheels take over, the government faces a £40 billion shortfall by 2030 if it sticks to old revenue models.
Critics argue this adds cost burdens to EV drivers just as the nation pushes green goals, muddying the message with mixed signals: encourage electric, then tax harder. Yet proponents see a pay-per-mile model as fair those who use the roads more should pay more.
No final design is set. Options include odometer checks during MOTs or tax renewals to verify mileage. Complexities loom: rural drivers logging long miles might face sharp hikes, while city drivers could benefit from lower costs.
For now, this proposed system nicknamed “VED+” is poised to reshape how Britain funds its roads in a greener future. The era of “one-size-fits-all” flat road taxes is ending.
The message to drivers: pay for the road you use, not just the fuel you burn.