New Pay-Per-Mile Road Tax (eVED): What It Is, Who Pays, and Why It Matters

The UK government has launched a consultation on electric Vehicle Excise Duty (eVED) — a proposed pay-per-mile charge for battery-electric cars (EVs) and plug-in hybrids (PHEVs).

The stated goal is straightforward: as more drivers move away from petrol and diesel, fuel duty receipts fall, and the government wants a replacement mechanism that still scales with road usage (miles driven) — similar to how fuel duty scales with fuel consumed.

This article explains what eVED is, how it could work in practice, what it may cost, and what it quietly signals about the UK direction of travel.

1) What is eVED?

eVED stands for electric Vehicle Excise Duty. It is a proposed mileage-based tax that would apply to:

• Fully electric cars (EVs / BEVs)
• Plug-in hybrid cars (PHEVs)

It is designed to be integrated into the existing Vehicle Excise Duty (VED) process (the annual vehicle tax administered by DVLA), so most people would interact with it on the same annual renewal cycle.

The official consultation states that eVED would take effect from April 2028.

2) The proposed eVED rates

The consultation document sets out these headline rates:

• EVs (fully electric): 3 pence per mile
• PHEVs (plug-in hybrids): 1.5 pence per mile

The government frames the EV rate as around half the average per-mile fuel duty paid by petrol/diesel drivers.

It also proposes that the eVED rate would be uprated in future years in line with CPI inflation to maintain real-terms value.

3) What would drivers actually pay?

The consultation includes a simple illustration:

• 5,000 miles x 3p = £150 per year (about £12.50/month) for a fully electric car.

It also provides a broader comparison example:

• an EV driver doing 8,000 miles/year would pay around £240/year in eVED (~£20/month)
• a petrol/diesel driver doing similar mileage might pay roughly £480/year in fuel duty (~£40/month)

So the policy is positioned as: EVs start paying something, but still pay less per mile than petrol/diesel.

4) How would mileage be reported and checked?

The core concept is not GPS tracking, but odometer-based reporting.

4.1 Annual reporting at renewal

Under the proposal, when you renew VED, you would:

1. Enter your current odometer reading
2. Estimate your mileage for the year ahead
3. Pay eVED either upfront or in monthly payments (Direct Debit), alongside VED
4. Submit end-of-year mileage to trigger reconciliation (pay more if you under-estimated; receive a credit/refund if you over-estimated)

4.2 Checks using existing systems

The consultation indicates mileage would be checked annually, typically through MOT mileage readings (already recorded today), and for newer cars around early registration anniversaries.

This is an important design choice: the government explicitly says it has ruled out charging based on when or where people drive.

5) Privacy: the policy line (and the trade-off)

A key selling point is privacy.

The consultation says eVED is designed to protect motorists by not charging based on location or time-of-day, which implies no requirement for GPS-style tracking to calculate the tax.

But there is a trade-off:

• because the system avoids location-based measurement, mileage driven overseas would still count, similar to fuel duty not varying by where a car is driven.

In short: the proposal prioritises simplicity and privacy over perfect geographic precision.

6) Who is in scope (and who is not)

In scope (from April 2028)

• All UK-registered EV cars and PHEV cars

Out of scope at launch

• vans, motorcycles, HGVs, buses/coaches (at least initially)

PHEVs: why the reduced rate?

PHEVs can drive on electricity or petrol/diesel. The government proposes the reduced 1.5p rate because requiring drivers to report exact electric vs petrol miles would be considered too complex and intrusive. The reduced rate is positioned as a compromise.

7) What the consultation quietly reveals about where this is going

Even though eVED applies only to EVs/PHEVs (for now), it points to a broader reality:

• Fuel duty is a shrinking tax base as electrification increases.
• Governments still need a way to fund roads and transport infrastructure.
• Mileage-based taxation is one of the most direct replacements.

That does not automatically mean a universal road pricing system is imminent — but it does make the concept of mileage-based charging more normal.

8) What the YouTube video adds (high level)

The video titled "New Pay Per Mile Road Tax (eVED) - What You Need To Know" describes eVED as a UK per-mile charge for EV keepers starting from April 2028 and frames it as something drivers should understand early.

Note: I could not access a full transcript of the YouTube page in this environment (fetch throttling), so the detailed breakdown above is built primarily from the official consultation and consultation PDF.

9) Practical takeaways for households

If you drive or plan to buy an EV or PHEV:

• Budget for a per-mile charge from 2028.
• Expect an annual cycle tied to VED renewal.
• Keep an eye on the consultation outcomes: details like reconciliation rules, enforcement, and edge cases (selling a car mid-year, SORN, scrappage, odometer faults) matter in real life.

If you care about the direction of UK motoring taxes:

• eVED is not just about EV drivers paying more.
• It is a public step toward mileage-as-a-tax-base.

Sources (accessed 20 December 2025)

Official consultation and technical detail:

• HM Treasury: Consultation page (published 26 Nov 2025; updated 2 Dec 2025): https://www.gov.uk/government/consultations/consultation-on-the-introduction-of-electric-vehicle-excise-duty-eved
• HM Treasury: Consultation PDF ("Consultation on the Introduction of Electric Vehicle Excise Duty (eVED)"): https://assets.publishing.service.gov.uk/media/692ef30b345e31ab14ecf8bc/eVED_Consultation.pdf

Coverage / context:

• The Guardian (Budget coverage mentioning the new mileage-based charge): https://www.theguardian.com/politics/2025/nov/26/reeves-freezes-fuel-duty-for-now-as-she-confirms-3p-a-mile-electric-vehicle-charge
• ICAEW (tax summary referencing rates and CPI indexation): https://www.icaew.com/insights/tax-news/2025/nov-2025/budget-new-levies-include-charge-on-electric-vehicles

Video referenced by the user:

• YouTube (title/description snippet):