Autumn Budget to unveil 3p per mile EV charge from 2028

Chancellor Rachel Reeves is expected to set out plans in her Autumn Budget on November 26 to introduce a pay-per-mile charge for electric vehicles, under which EV drivers would pay about 3p for every mile driven. The measure, officials say, would be introduced from 2028 after a public consultation and be collected alongside vehicle excise duty.

Treasury officials argue the proposal is intended to make up for sharply falling fuel duty receipts as more drivers switch from petrol and diesel to electric cars. Fuel duty currently raises more than £25 billion a year, but EVs do not generate equivalent tax revenue at the pump. The Treasury estimates a per-mile charge could raise around £1.8 billion by 2031 and says it would help distribute motoring tax more evenly as the fleet electrifies.

Under the reported design, EV owners would declare an estimated annual mileage and pay the charge up front as part of their VED payment. If drivers exceed their declared distance they would top up the difference; unused mileage would be carried forward. Initial implementation would apply mainly to battery electric vehicles, with hybrids subject to a lower rate. Officials say enforcement and...