EV drivers to face new pay-per-mile tax from 2028, Reeves confirms in Budget

"Electric vehicle owners will be required to pay a new 3p-per-mile tax from 2028, Chancellor Rachel Reeves confirmed today in the Autumn Budget - marking the UK's first dedicated mileage charge for zero-emission cars."

""Today's announcement signals a notable shift in the sustainable transport market as the government begins moving revenue focus away from petrol and diesel vehicles," he said. "Confirmation from the Chancellor will understandably prompt concerns among current EV drivers and those considering making the switch.""

"He added that, while the move has long been expected, the new charge could feel steep for motorists who had not budgeted for an additional per-mile cost. High-mileage drivers, in particular, may need to rethink financial assumptions about total cost of ownership. He warned that the tax presents another hurdle for EV manufacturers already struggling to persuade hesitant consumers to adopt electric vehicles, especially amid concerns about upfront costs, charging access and declining resale values."

""Even with this future tax in place, EVs will remain cost-effective and sustainable transport choices," he said. "Drivers still benefit from low servicing costs and increasingly competitive electricity tariffs. The long-term financial and environmental advantages of going electric have not changed.""

A new 3p-per-mile tax on electric vehicles will take effect in the UK from 2028 to offset declining fuel duty revenue as motorists switch from petrol and diesel. The Treasury frames the charge as a long-term fiscal adjustment to protect public finances during the transport sector's clean-energy transition. Industry experts warn the levy will force drivers to reassess running costs and hit high-mileage users hardest, while complicating manufacturers' efforts to persuade hesitant consumers amid concerns over upfront prices, charging access and resale values. Supporters note EVs still offer low servicing costs and competitive electricity tariffs.

Read at Business Matters