LONDON / RankWire.AI / – The UK government has progressed with plans for a pay-per-mile levy on electric vehicles by releasing its consultation feedback and draft legislation. HM Treasury published the documents on July 13 and confirmed an effective start date of April 1, 2028. The draft provisions are now undergoing a technical consultation that concludes on Sept. 7. This charge, designated as Electric Vehicle Excise Duty, will operate alongside the existing Vehicle Excise Duty paid by vehicle owners.
Battery-electric and hydrogen fuel cell vehicles will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile because they also bear fuel duty when using petrol or diesel. An electric vehicle driving 8,000 miles annually would face a mileage fee of £240, while a driver covering 10,000 miles would pay £300. The government intends to raise these rates in line with consumer price inflation from the 2029-30 tax year onward.
Vehicle operators will need to submit an odometer reading when renewing their yearly vehicle tax. They will also estimate their upcoming mileage for the period, typically covering one year. Payments can be made upfront based on the estimate or divided throughout the year. Once the actual odometer reading is submitted later, the DVLA will reconcile the estimate with real mileage, utilizing existing MOT mileage records where available and calculating any necessary adjustments.
Mileage reporting to replace additional inspections
A previous proposal requiring newer electric vehicles to undergo separate annual mileage inspections has been dropped by the government. As cars generally do not require an MOT during their first three years (or four years in Northern Ireland), keepers will report mileage and provide estimates at each tax renewal. The initial MOT will serve as a verified reading for comparison, but the DVLA retains the authority to order official mileage checks if fraud or noncompliance is suspected.
This system will not involve tracking devices or gather data on individual journeys, nor will it charge different rates based on where or when a vehicle travels. Consequently, mileage accumulated abroad by UK-registered vehicles will count towards the tax. The scheme will include battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles. However, electric vans, buses, coaches, and heavy goods vehicles will initially remain outside its scope. Connected-car mileage reporting will also stay optional.
Consultation influences final tax framework
During the consultation period from November 2025 through March 2026, HM Treasury received a total of 5,133 responses, with 92% coming from individuals. Stakeholders expressed concerns about administrative burdens, mileage verification processes, potential fraud, overseas travel, and the impact on fleet operators. In response, the government plans to simplify procedures for leasing and rental firms, including estimated readings, bulk licensing, and more adaptable payment options. Officials will also develop guidance and tools to assist drivers in estimating their annual mileage.
The initiative is expected to impact approximately 5.6 million vehicles in the 2028-29 fiscal year, according to the government’s impact assessment. Revenue is projected at £1.1 billion for that year, as certified by the Office for Budget Responsibility. Forecasts indicate that revenues will rise to £1.44 billion in 2029-30 and £1.87 billion in 2030-31. Prior to implementation, work will be carried out on DVLA systems, payment regulations, mileage verification, refunds, penalties, appeals, and dispute procedures to prepare for the electric vehicle mileage tax rollout.