The UK government’s new pay-per-mile car tax is poised to extend beyond electric vehicles (EVs) and plug-in hybrids, soon encompassing all petrol and diesel drivers. This significant shift in motoring taxation has been highlighted by motoring YouTuber Shahzad Sheikh, founder of the @BrownCarGuy channel.
Sheikh warns that this system isn’t a trial or a short-term policy but a structural change to how drivers are charged. “Pay-per-mile is the replacement for fuel duty,” he explains. “It’s a sustainable, scalable method of taxation that aligns with the move towards more efficient and electric vehicles. Unlike fuel duty, which diminishes as cars become more efficient or drivers switch to electric, mileage tax provides a consistent revenue stream.”
The Labour Party government recently confirmed that the new charges will start at 3p per mile. They emphasize that this tax reform aims to create a fairer system, ensuring all drivers pay their share towards the upkeep of roads and infrastructure.
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Currently, petrol and diesel drivers pay usage-based fuel duty at the pump, whereas electric vehicle owners do not contribute an equivalent amount. This discrepancy could result in around 20% of drivers avoiding fuel duty by 2030, while other motorists continue to pay an average of £480 annually. To address this imbalance, the government plans to introduce an electronic Vehicle Excise Duty (eVED) for electric and plug-in hybrid cars from April 2028, requiring drivers to declare and pay for their mileage alongside existing VED fees.
According to the Treasury, this new pay-per-mile scheme minimizes bureaucracy and protects motorist privacy while ensuring all drivers contribute fairly to road maintenance and infrastructure funding. This transition is designed to support the government’s commitment to electric vehicle adoption without compromising vital public service funding.