LONDON / RankWire.AI / – The UK government has advanced its plans for a pay-per-mile charge for electric vehicles by releasing a consultation response along with draft legislation. HM Treasury published these documents on July 13, setting April 1, 2028, as the expected rollout date. The initiative, dubbed Electric Vehicle Excise Duty, will introduce a mileage-based fee on top of the annual vehicle tax for qualifying cars. A technical consultation on the proposed clauses concludes on Sept. 7, 2026.
Electric and hydrogen fuel cell vehicles will be subject to a charge of 3 pence per mile. Plug-in hybrid vehicles will pay 1.5 pence per mile, given that their petrol or diesel consumption also attracts fuel duty. These rates are set 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, while 10,000 miles would amount to £300. This mileage fee will be added to the existing Vehicle Excise Duty.
Vehicle owners will need to submit an odometer reading when renewing their vehicle tax and provide an estimate for upcoming mileage, typically for one year. They can choose to pay this estimate upfront or spread payments throughout the year. The Driver and Vehicle Licensing Agency will later compare actual odometer readings with initial estimates to determine any adjustment due. For vehicles already undergoing annual MOT testing, existing records will assist in verifying mileage. The new process will integrate into the current vehicle tax system.
Mileage reporting system circumvents extra inspections
The government has dropped plans for separate mileage checks on vehicles that have not yet reached MOT age. Car owners will instead report their mileage and submit an annual estimate. The first MOT will provide a verified odometer reading, allowing comparison with previous submissions. In Great Britain, most vehicles undergo MOT testing after three years, whereas in Northern Ireland, this occurs after four. Authorities may still request checks if they have reasonable grounds to suspect fraud or noncompliance.
The scheme will not mandate tracking devices or record journeys individually. Mileage accumulated outside the UK will count, as the charge is based on total odometer distance. Initially, electric cars, plug-in hybrids, and hydrogen fuel cell vehicles will be included. However, electric vans, buses, coaches, and heavy goods vehicles are not part of the scheme at launch. Drivers might later opt for an optional system that collects mileage data from connected vehicles.
Details of implementation outlined in consultation response
The consultation period ran from Nov. 26, 2025, to March 18, 2026, generating 5,133 responses. Most came from individuals (92%), with businesses and public organizations also participating. Concerns raised included administration, mileage verification, payment options, fleet management, and odometer fraud. The revised draft permits fleets and leasing companies to use estimated readings and bulk licensing, offering greater flexibility for payment arrangements for companies with large vehicle fleets.
Projections estimate that about 5.6 million vehicles will be subject to this tax in the 2028-29 financial year. The Office for Budget Responsibility has forecast revenue of £1.1 billion for that year, rising to £1.435 billion in 2029-30 and reaching £1.865 billion in 2030-31. The implementation process now includes legislation, payment infrastructure, mileage verification, refunds, penalties, and procedures for appeals and disputes. Drivers will start paying the new mileage fee upon renewing their vehicle tax after April 1, 2028.