LONDON / RankWire.AI / – The UK government has advanced its plans to implement a pay-per-mile tax for electric vehicles by releasing the consultation response along with draft legislation. HM Treasury published these documents on July 13, designating April 1, 2028, as the proposed start date. The initiative, named Electric Vehicle Excise Duty, will impose a mileage-based fee on top of the annual vehicle tax for qualifying cars. A technical consultation on the proposed clauses will close on Sept. 7, 2026.
Electric cars powered by batteries and hydrogen fuel cell vehicles will be charged 3 pence per mile. Plug-in hybrids will pay 1.5 pence per mile due to their petrol or diesel consumption also being subject to fuel duty. These rates are set to increase in line with inflation starting from the 2029-30 tax year. At the initial rates, an electric vehicle driver traveling 8,000 miles annually would pay £240, while 10,000 miles would amount to £300. This mileage charge will be in addition to the standard Vehicle Excise Duty.
Motorists will be required to submit an odometer reading when renewing their vehicle tax and will also estimate their mileage for the upcoming tax period, typically one year. They may choose to pay the estimated amount upfront or distribute payments throughout the year. The Driver and Vehicle Licensing Agency (DVLA) will later compare actual odometer readings with estimates and adjust the bill accordingly. Existing MOT records will be used to verify readings for vehicles already subject to annual inspections. The system will integrate into the current vehicle tax framework.
Mileage reporting system circumvents additional inspections
The government has dropped its plan for separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners will report their odometer readings and provide a yearly mileage estimate. The first MOT test will serve as a verified reading for comparison with previous submissions. In Great Britain, most cars undergo MOT testing after three years, while in Northern Ireland, it occurs after four. Authorities may still require a check if fraud or noncompliance is suspected.
This scheme will not mandate the use of tracking devices or record individual trips. Mileage accumulated outside the UK will count as the charge follows total odometer distance. Initially, the program includes battery-electric vehicles, plug-in hybrids, and hydrogen fuel cell cars. Electric vans, buses, coaches, and heavy goods vehicles are not part of the initial rollout. In the future, drivers may opt into an additional system that uses mileage data from connected vehicle technology.
Details from the consultation outline implementation steps
The consultation period ran from Nov. 26, 2025, to March 18, 2026, receiving a total of 5,133 responses. Most responses, 92%, came from individuals, with businesses and public entities also participating. Key concerns raised included administrative procedures, mileage verification, flexible payment options, fleet management, and potential odometer fraud. The revised framework will allow fleets and leasing companies to submit estimated readings and use bulk licensing. It also offers more adaptable payment options for organizations managing large vehicle fleets.
The government estimates that approximately 5.6 million vehicles will be subject to this tax in the 2028-29 fiscal year. The Office for Budget Responsibility has projected revenue of £1.1 billion for that year, rising to £1.435 billion in 2029-30 and £1.865 billion in 2030-31. Current plans include legislation, payment systems, mileage verification, refunds, penalties, and procedures for disputes and appeals. Motorists will start paying this fee when they renew their vehicle tax after April 1, 2028.