The Labour Party government’s upcoming pay-per-mile car tax scheme, known as eVED, has sparked concerns among experts about the capability of the DVLA’s computer systems to manage refunds efficiently. Set to launch in April 2028 following an announcement by Treasury Secretary Rachel Reeves, eVED will charge electric vehicle (EV) owners 3p per mile and plug-in hybrid electric vehicle (PHEV) owners 1.5p per mile.
The government aims to replace declining fuel duty revenues with a fairer usage-based tax, requiring drivers to estimate their annual mileage and pay upfront or spread payments over the year. At year-end, motorists must report their actual mileage to reconcile payments, with the DVLA conducting annual mileage checks, typically aligned with MOT inspections or vehicle registration anniversaries.
Ben Nelmes, CEO of New AutoMotive, welcomed the decision to discontinue mileage checks for new vehicles but voiced significant concerns over the broader package, calling it “untested” and potentially a heavy burden for future government officials. He highlighted a critical flaw: the DVLA’s outdated legacy systems cannot even process straightforward automatic refunds when a vehicle is sold or scrapped—a glaring issue for the new scheme’s success.
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The DVLA acknowledged these challenges, stating that at launch, the scheme will focus on carrying forward mileage credits rather than issuing automatic refunds in every scenario. Refunds will be available in specific cases, such as unexpected financial hardship. Further information on refunds related to vehicle ownership changes and lifecycle events will be revealed later this year.
As the eVED policy prepares for rollout, its success will heavily depend on resolving these system limitations to avoid complications for drivers and administrators alike.