Electric vehicle (EV) owners in the UK could soon face a new road tax, as the government explores ways to boost revenue in the upcoming Budget.
According to report, discussions are underway within government about introducing a new levy for EV drivers to address a growing shortfall in fuel duty, which currently applies only to petrol and diesel vehicles.
A government spokesperson said the aim was to create “a fairer system for all drivers,” adding that the transition to electric vehicles must still be supported.
Reports also reveal that ministers are considering a pay-per-mile charge from 2028, with EV drivers potentially paying 3p per mile. Hybrid drivers would be charged at a lower rate.
Under the proposal, motorists would estimate their annual mileage and pay upfront, with adjustments made at year-end depending on actual usage. The system could add roughly £12 to a journey from London to Edinburgh.
Electric cars stopped being exempt from vehicle excise duty in April, following changes made in the 2022 Budget. Despite this, the government insists it remains committed to supporting EV adoption, pointing to £4bn in funding for infrastructure and grants of up to £3,750 per vehicle.
Critics, however, warn the proposed tax could slow EV uptake. The Society of Motor Manufacturers and Traders called it “the wrong measure at the wrong time,” while AA president Edmund King urged ministers to tread carefully to avoid undermining the zero-emission goals.
Autotrader chief executive Nathan Coe said the move could make EVs less appealing. “They already cost more upfront,” he said, “and higher running costs will only reduce demand.”
Shadow chancellor Mel Stride condemned the plan, calling it “another tax raid” that unfairly targets commuters.
