As the UK sees record numbers of drivers shifting from petrol and diesel to electric vehicles (EVs), the government is exploring a new “pay-per-mile” tax model for EVs. The move comes amid shrinking fuel duty revenues (currently 52.95p per litre) and questions around how the tax system should evolve to reflect growing EV uptake.

What’s being proposed for EV road tax?

  • According to media reports, a scheme is under consideration that would see EV owners paying around 3p per mile driven, from approximately 2028. The aim is to plug the drop in fuel duty income as more motorists go electric. Reports say the government is consulting on the idea ahead of the Chancellor’s autumn budget.
  • At the same time, the previously exempt status of EVs for vehicle excise duty (VED) has ended. From 1 April 2025, most electric cars registered on or after 1 April 2025 pay a first-year VED of £10, then £195 annually from year two.
  • EVs with a list price over £40,000 at new registration also incur the “expensive car supplement” (often £425 per year for five years) on top of the standard VED.

How could this affect EV drivers?

Here’s an example to illustrate:

  • A new EV priced under £40,000. Under current rules you pay VED of £10 in year one (if registered April 2025 onwards), then £195 from year two.
  • If you drive 10,000 miles a year and the 3p-per-mile tax applies, that adds £300 on top of VED = £495 total.
  • For EVs costing over £40,000, you also add the luxury supplement (c. £425) which could push annual tax toward ~£620 or more. 
    Even with these extra costs, EV running costs remain lower than internal-combustion engine (ICE) cars for many drivers—especially those charging at home. But for people who rely heavily on public charging, the balance could tighten.

Why is the government considering this?

  • Fuel duty income is in decline. As more drivers switch to EVs, tax revenue from petrol/diesel falls. The pay-per-mile model is seen as a way to make sure all road users contribute toward road infrastructure.
  • The government states the intention is to create a “fairer system” so EV drivers also contribute, since fuel duty doesn’t apply to electric energy.
  • Public sentiment: research indicates growing support for the idea that EV owners should pay VED or related contributions. For example, around 69% of UK drivers agreed EV drivers should pay VED. 

What’s the industry response?

  • Society of Motor Manufacturers and Traders (SMMT) and other car-industry bodies warn that a rushed introduction of a per-mile tax could undermine the EV transition.
  • The AA says the government must tread carefully so that EV tax policy doesn’t act like a “poll tax on wheels”.
  • Some industry voices emphasise that government focus should remain on boosting charging infrastructure and maintaining incentives, rather than adding new costs to drivers.

Key things to watch for EV buyers and leasers

  • Check the registration date of your EV. Cars registered on/after 1 April 2025 have the new VED-and-supplement rules.
  • For models costing over £40,000 when new, budget for the expensive-car supplement in your running cost calculations.
  • Consider how you charge your car; home charging is still likely the most cost-effective; public charging combined with higher tax/charging-costs could reduce your savings.
  • If a per-mile tax is introduced in 2028, your annual running cost may rise. Factor this into leasing or purchase decisions.
  • Stay updated: the details still need to be finalised (how the mileage is monitored, triggers, exemptions, etc.).

What this means for “EV road tax” searches

If you’re looking for information on EV road tax UK, electric vehicle tax UK, or pay-per-mile EV tax, this is the current landscape:

  • Electric cars are no longer exempt from VED.
  • Standard EV VED: £195 per year (for most cars registered since April 2025 or between April 2017 and March 2025).
  • First year rate (for cars registered 1 April 2025 onwards): £10.
  • Cars over £40,000 list price carry extra annual tax for five years.
  • Proposed pay-per-mile tax may overlay the above from 2028, adding additional cost for EV drivers.

Final word

The shift in road tax policy means owning an EV will no longer mean zero tax. But for many drivers, EVs will still be cheaper to run than petrol or diesel. The looming pay-per-mile proposal is a signal: when you pick your next EV, consider first-year tax, annual VED, list price thresholds, how you charge, and potential future mileage-based charges.

If you’re thinking of buying or leasing an EV, it’s wise to build these costs into your decision now.