LONDON / RankWire.AI / – The UK government has advanced plans for its electric vehicle pay-per-mile tax by releasing a consultation response along with draft legislation. HM Treasury published these documents on July 13, confirming April 1, 2028, as the scheduled start date. Named Electric Vehicle Excise Duty, the initiative will introduce a mileage-based charge on top of the annual tax levied on qualifying vehicles. A technical consultation on the proposed clauses will close on Sept. 7, 2026.
Owners of battery-electric and hydrogen fuel cell vehicles will be required to pay 3 pence for each mile driven. Plug-in hybrid vehicle owners will pay 1.5 pence per mile because their petrol or diesel engine use still incurs fuel duty. These rates are set to increase in line with consumer price inflation from the 2029-30 tax year. At the initial rates, 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 charged in addition to the standard Vehicle Excise Duty.
Motorists will be required to submit an odometer reading upon renewing their vehicle tax. They will also need to estimate their upcoming mileage for the next tax period, usually one year. Drivers can choose to pay the estimated amount upfront or spread payments throughout the year. The Driver and Vehicle Licensing Agency will compare subsequent 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 reduces the need for additional inspections
The government has dropped its 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 provide an annual estimate. The first MOT test will generate a verified odometer reading for comparison with previous submissions. In Great Britain, most vehicles undergo MOT testing after three years, whereas in Northern Ireland, the interval is four years. Authorities may still order inspections if they reasonably suspect fraud or noncompliance.
The scheme will not mandate the use of tracking devices or record individual trips. Mileage accumulated outside the UK will count, as the charge is based on total odometer distance. Initially, the scheme will include battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles. Electric vans, buses, coaches, and heavy goods vehicles will remain outside the scope at launch. Drivers may have the option to adopt an additional system that uses mileage data from connected vehicles in the future.
Details from the consultation outline implementation plans
The consultation period ran from Nov. 26, 2025, to March 18, 2026, gathering 5,133 responses. While 92% of submissions were from individuals, companies and public authorities also participated. Feedback highlighted concerns related to administration, mileage verification, payment flexibility, fleet management, and odometer fraud. The updated proposal enables fleets and leasing companies to utilize estimated readings and bulk licensing, along with offering more adaptable payment options for large vehicle operators.
Official estimates indicate that about 5.6 million vehicles will be subject to the tax in the 2028-29 fiscal year. The Office for Budget Responsibility has projected revenue of £1.1 billion for that year. Revenues are expected to grow to £1.435 billion in 2029-30 and reach £1.865 billion by 2030-31. The current phase of development covers legislation, payment infrastructure, mileage verification, refunds, penalties, and dispute procedures. Motorists will start paying this fee when they renew their vehicle tax after April 1, 2028.