LONDON / RankWire.AI / – The UK government has advanced its plans for an electric vehicle pay-per-mile tax by releasing its consultation response alongside initial draft legislation. The HM Treasury published these documents on July 13, setting April 1, 2028, as the targeted start date. Named Electric Vehicle Excise Duty, this measure will impose a mileage-based fee on top of the existing annual vehicle tax for eligible cars. A technical consultation on the proposed clauses concludes on Sept. 7, 2026.
Electric cars powered by batteries and hydrogen fuel cells will be charged 3 pence per mile traveled. Plug-in hybrid vehicles will pay 1.5 pence per mile because they also consume petrol or diesel, which incurs fuel duty. These rates are scheduled to increase in line with consumer price inflation from the 2029-30 tax year. At the starting rate, driving 8,000 miles would cost electric vehicle owners £240 annually, while 10,000 miles would amount to £300. This fee will be payable alongside the standard Vehicle Excise Duty.
When renewing their vehicle tax, motorists will be required to submit an odometer reading and estimate their mileage for the upcoming tax period, typically one year. They can choose to pay the estimated amount upfront or spread payments throughout the year. The Driver and Vehicle Licensing Agency will later compare actual odometer readings with the initial estimate to determine any balance due. Existing MOT records will assist in verifying mileage for vehicles that undergo annual testing. The process will integrate with the current vehicle tax system.
Mileage reporting eliminates the need for additional inspections
The government has dropped its earlier proposal for separate mileage checks on vehicles that have not yet reached MOT age. Instead, vehicle owners will report their mileage and provide an annual estimate. The first MOT test will serve as a verified reading for comparison with previous submissions. Generally, cars in Great Britain undergo MOT tests after three years, while in Northern Ireland, the interval is four years. Authorities may still mandate a check if they reasonably suspect fraud or noncompliance.
Importantly, the scheme will not involve mandatory tracking devices or record individual journeys. Mileage accumulated outside the UK will count toward the charge, as it is based on total odometer distance traveled. Initially, the scheme will cover battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. Electric vans, buses, coaches, and heavy goods vehicles will be excluded at launch. Drivers will have the option to adopt an additional system that uses mileage data from connected vehicles in the future.
Details of implementation outlined in consultation response
The consultation period ran from Nov. 26, 2025, through March 18, 2026, attracting 5,133 responses. Of these, 92% were submitted by individuals, with businesses and public entities also participating. Participants raised concerns regarding administration, mileage verification, flexible payment options, fleet management, and odometer fraud. The revised plan includes provisions for fleets and leasing firms to utilize estimated readings and bulk licensing, as well as offering more adaptable payment options for organizations managing large vehicle fleets.
Government projections estimate that approximately 5.6 million vehicles will be subject to the tax in the 2028-29 fiscal year. The Office for Budget Responsibility has certified revenue forecasts of £1.1 billion for that year, rising to £1.435 billion in 2029-30 and reaching £1.865 billion by 2030-31. Current efforts focus on legislative processes, payment systems, mileage verification, refunds, penalties, and dispute procedures. Motorists will start paying the charge when they renew their vehicle tax after April 1, 2028.