The UK government has confirmed the final design of its mileage-based Electric Vehicle Excise Duty (eVED), which will come into effect in April 2028, introducing a per-mile charge for electric cars and plug-in hybrids alongside the existing Vehicle Excise Duty (VED).
The revised framework follows a public consultation that received more than 5,000 responses. After reviewing feedback from motorists, industry groups and fleet operators, ministers simplified several compliance requirements, including scrapping plans for additional mileage checks on newer electric vehicles.
New Mileage-Based Charges
Under the new framework, battery-electric vehicles (BEVs) will pay 3 pence per mile, while plug-in hybrid electric vehicles (PHEVs) will be charged 1.5 pence per mile. The mileage-based levy will apply in addition to standard Vehicle Excise Duty, while electric vans will remain exempt.
The government said the policy is intended to create a long-term replacement for declining fuel duty revenues as the transition to zero-emission vehicles accelerates.
“While drivers of petrol and diesel vehicles contribute to the public finances through fuel duty – a tax based on how much they drive – electric vehicle users do not currently pay an equivalent usage-based tax.”
The Treasury added that there was broad support during the consultation for a system where motorists who drive further contribute more toward maintaining public finances.
The government also plans to invest more than £7.5 billion over the next decade to support zero-emission mobility, with part of the funding expected to come from eVED revenues.
Government Removes Additional Checks for Newer EVs
One of the biggest changes from the original proposal is the removal of mandatory mileage verification for vehicles less than three years old.
Initially, the government planned to require newer EVs and PHEVs to undergo separate mileage checks because they are not yet subject to annual MOT inspections. Following consultation feedback, that requirement has been withdrawn.
“The government has carefully considered the consultation responses and refined the proposed design. In particular, the government will not proceed with the proposed requirement for vehicles under three years old, which are not currently required to have an annual MOT, to have additional mileage checks.”
Instead, motorists will submit an odometer reading together with an estimate of their expected annual mileage when renewing Vehicle Excise Duty. The Driver and Vehicle Licensing Agency (DVLA) will calculate an estimated eVED payment, with mileage later reconciled against official records.
Drivers will also be able to voluntarily submit mileage directly from connected vehicles through built-in telematics systems, although participation in the connected-car reporting scheme will remain optional.
Simpler Reporting for Fleet Operators
The government has also revised the framework for fleet operators, leasing firms and rental companies.
Rather than requiring individual drivers to report mileage, fleet operators will be permitted to submit estimated mileage figures centrally, reducing administrative complexity.
The revised rules also allow operators to settle outstanding eVED liabilities before vehicles are sold or transferred, helping prevent tax obligations from affecting residual values or delaying remarketing.
Industry Welcomes Changes but Maintains Concerns
Industry organisations welcomed several of the administrative improvements while continuing to question the timing of the new tax.
“It is great that the Government has taken some of the roughest edges off its eVED plans. They’ve accepted that a tax designed around private motorists won’t work for the fleets that are driving the UK’s transition to electric vehicles,” said Toby Poston, chief executive of the British Vehicle Rental and Leasing Association (BVRLA).
“But there is no avoiding the fact that you can’t create a smooth switch to electric vehicles by making them more expensive to own. The mechanics of the tax may have improved, but the timing is still wrong.”
EVA England also expressed concerns about the policy’s complexity.
“This policy still does not work for drivers. The Government has made one welcome change for newer EVs, but the wider scheme remains too complex, risks leaving people out of pocket and fails to give drivers the confidence they need,” said Vicky Edmonds, chief executive officer of EVA England.
The mileage-based eVED forms part of the UK’s longer-term strategy to replace fuel duty revenues as electric vehicles become more common while maintaining funding for the country’s road network.
