Millions of drivers will be hit with new pay-per-mile car tax fees as Rachel Reeves confirmed the move in her Autumn Budget. The Chancellor will announce that electric car owners will be hit with a 3p per-mile charge from 2028 in a major overhaul.
The move means motorists will be charged for every journey they make, as much as £12 to travel between London and Edinburgh. The move aims to offset lost revenue generated by fuel duty, which is paid by every petrol and diesel owner at the pumps. In the Office for Budget Responsibility (OBR) report released early and ahead of the Budget, experts said the fee would be around "half the fuel duty rate paid by drivers of petrol cars", with the scheme to raise around £1.4billion.
Speaking in the House of Commons, Ms Reeves said: "Because all cars cintriubute to the wear and tear on our roads, I will ensure drivers are taxed according to how much they drive and not just by the type of car they own, by introducing the Electric Vehicle Excise Duty on electric cars.
"This will be payable each year alongsie Vehicle Excise Duty at 3p per mile for electric cars and 1.5p for plug-in hybrids, helping us to double road maintenance finding in England over the course of the Parliament."
Predictions ahead of the Budget suggested that a 3p per mile fee could cost motorists as much as £300 per year, a blow for those who have made the switch to EVs. So far, 1.7million electric cars are registered in the UK, with up to six million models likely to be on the roads by 2028.
In the run-up to the Budget, motoring experts expressed concerns that the move could backfire on the Government by making electric cars less attractive to customers. Although EV sales are on the up, petrol vehicles still make up the majority of brand new and second-hand car sales in the UK.
A new What Car? survey of 4,368 in-market car buyers found that 52% of people said a new pay-per-mile rate would deter them from going electric. Meanwhile, only 20% accepted that the new per-mile tax charge on electric vehicles would be a good idea.
More concerningly, a total of 38% of respondents who said they were planning to buy an electric car admitted they would reconsider if a new pay-per-mile fee tax was introduced. The new tax charge is the latest in a series of blows to electric car owners over the course of the last year.
It comes after EVs were previously exempt from motoring tax fees, but Labour slapped drivers with Vehicle Excise Duty (VED) and Expensive Car Supplement charges back in April.
