The RAC has warned that drivers face £240 higher car tax bills when new Vehicle Excise Duty (VED) fees come into effect. The motoring expert has warned that zero-emission and hybrid vehicle owners face hundreds of pounds in extra fees from 2028, as part of Rachel Reeves’ new electric Vehicle Excise Duty (eVED) rate.
The Chancellor confirmed the introduction of eVED in 2028 in her last Autumn Budget, with officials explaining the charge was needed to offset the loss of fuel duty revenue as motorists transition to electric vehicles. The RAC has predicted exactly how much road users are set to pay, with those travelling an average 8,000 miles per year likely to see bills rise by £240.
The RAC explained: “From April 2028, drivers of electric and plug-in hybrid cars will pay more tax, with a new pay-per-mile eVED system being introduced. Under the new rules, electric car drivers will pay 3p per mile while plug-in hybrid drivers will pay 1.5p per mile.
“According to the Government, the average electric car driver (driving 8,000 miles a year) will pay an extra £240 per year alongside the existing Vehicle Excise Duty (VED) rate.”
A per mile fee will mean road users pay higher rates the more they travel, with those racking up higher diostances set to be more affected. A cost of 3p per mile means that road users will pay around £30 for every 1,000 miles driven.
It means those travelling 10,000 miles per year will pay £300 per annum, with those heading out in their cars for 15,000 miles set to be charged £450.
Those heading between Oxford and Cambridge will pay £3.06 to make the trip, while those embarking on the 837 miles between John O’Groats and Lands End will need to cough up £25.11. It is understood drivers will estimate their mileage, with this set to be checked at an annual MOT test.
However, there has been concern that the new charge will deter road users from switching to electric vehicles in the first place.
The Office for Budget Responsibility (OBR) has suggested there could be as many as 440,000 fewer EV sales as a result of the measure.
