LONDON / RankWire.AI / – The UK government has advanced its plans for an electric vehicle pay-per-mile taxation scheme by publishing its consultation feedback and draft laws. HM Treasury issued the relevant documents on July 13, with April 1, 2028, set as the target launch date. Named Electric Vehicle Excise Duty, the new measure will introduce a mileage-based charge on top of the existing annual vehicle tax for qualifying cars. A technical consultation on the draft provisions will close on Sept. 7, 2026.
Electric vehicles powered by batteries or hydrogen fuel cells will be charged 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile since their petrol or diesel engines also attract fuel duty. These rates are scheduled to increase in line with consumer price inflation starting from the 2029-30 tax year. At the initial rate, driving 8,000 miles would cost an electric vehicle owner £240 annually. Covering 10,000 miles would amount to £300. This mileage fee will be added on top of the standard Vehicle Excise Duty.
Vehicle owners will need to submit their odometer readings when renewing their vehicle tax. They will also provide an estimate of upcoming mileage for the next tax period, usually one year. Payment can be made upfront based on the estimate or spread throughout the year. The Driver and Vehicle Licensing Agency (DVLA) will later compare actual readings with the estimates to determine any adjustments. Existing MOT records will serve as verification for cars already subject to annual testing. The system will integrate with the current vehicle tax framework.
Mileage reporting sidesteps additional inspections
The government has scrapped its earlier plan to conduct separate mileage checks on vehicles that have not yet reached MOT age. Instead, owners of such vehicles will report their mileage and submit an annual estimate. The first MOT will provide a verified reading for comparison with prior submissions. Typically, cars in Great Britain undergo MOT testing after three years, while Northern Ireland waits four years. Authorities may still require checks if there are reasonable suspicions of fraud or noncompliance.
The scheme will not mandate the use of tracking devices or record individual journeys. Mileage accumulated outside the UK will be counted, as the charge applies to total odometer distance. Initially, battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles are included in the scheme. Electric vans, buses, coaches, and heavy goods vehicles will remain outside the scope at launch. Drivers may later opt into an additional system that leverages connected car data for mileage tracking.
Details from the consultation outline implementation processes
The consultation period ran from Nov. 26, 2025, to March 18, 2026, garnering 5,133 responses. Most came from individuals (92%), with businesses and public sector entities also participating. Key issues raised included administration, mileage verification, flexible payment options, fleet management, and odometer fraud prevention. The revised plan allows fleets and leasing firms to use estimated readings and bulk licensing. It also offers more adaptable payment arrangements for companies managing large vehicle fleets.
Government projections indicate that around 5.6 million vehicles will be subject to this tax in the 2028-29 fiscal year. The Office for Budget Responsibility has confirmed revenue estimates of £1.1 billion for that year, with figures rising to £1.435 billion in 2029-30 and £1.865 billion in 2030-31. The implementation phase now includes developing legislation, payment systems, mileage verification, refunds, penalties, and dispute resolution procedures. Motorists will start paying this mileage fee when they renew their vehicle tax after April 1, 2028.