Rachel Reeves is set to slap British motorists around the face once again, with new car tax fees set to hammer British road users who rely most on their vehicles. Under new rules outlined by the Chancellor, certain road users will soon be charged based on how far they travel, with a new pay-per-mile fee in the pipeline for 2028.
The new Electric Vehicle Excise Duty (eVED) charge will see road users pay 3p per mile to get behind the wheel of fully EV machines, with hybrids charged at 1.5p per mile. The cost means that electric car users taking on the 837-mile journey between John O’Groats and Land's End will have to pay £25.11 in tax, while those heading 100 miles between Oxford and Cambridge will pay £3.
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The 3p per mile fee means someone travelling the UK average of 10,000 miles per annum will have to cough up £300 to retain their freedoms. The new charges have been introduced to offset the loss of petrol and diesel fuel duty as more road users switch away from combustion models to electric cars.
HMRC data shows fuel duty receipts for April 2025 to August 2025 are £10bn, down £0.1bn from the same period in the previous quarter. The Office for Budget Responsibility (OBR) forecast that fuel duty revenues would represent just 2% of total tax revenues in 2025/26.
This was massively down, with fuel duty fees accounting for almost 7% of the UK’s total tax back in 2019/20. The new fee drew backlash, with experts at the Society of Motor Manufacturers and Traders (SMMT) questioning the scheme.
Bosses suggested the move was the “wrong policy” at the wrong time, while EV experts also raised concerns that it could eventually reduce electric car sales.
However, the Government plans to press ahead with the scheme, rejecting any changes when asked by the Tories if VED costs were likely to be “reviewed”.
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Dan Tomlinson, Exchequer Secretary to the Treasury, said: “At Autumn Budget 2025, the government announced the introduction of Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028.
“Drivers will pay for their mileage alongside their existing Vehicle Excise Duty (VED).”
