Rachel Reeves Confirms New £180 Annual Charge for Drivers Covering 6,000 Miles in EVs

Chancellor Rachel Reeves has announced a new pay-per-mile tax targeting owners of electric vehicles (EVs) and plug-in hybrids, set to take effect from April 2028. This charge will see motorists paying 3p per mile for driving EVs, while hybrid drivers will be charged a lower rate of 1.5p per mile.

For an EV owner driving approximately 6,000 miles annually, this translates to an added cost of £180 per year, payable alongside their standard vehicle tax. Those who cover longer distances, such as commuters with lengthy journeys or residents in rural areas with limited public transport, will face even higher charges.

This new tax aims to create a fairer motoring tax system by ensuring all drivers contribute proportionally to road use. Currently, petrol and diesel drivers already pay based on fuel consumption and duty costs. The introduction of this mileage charge means EV drivers, who were only recently required to start paying vehicle tax last year, will now also contribute based on their actual driving distance.

Treasury Minister Dan Tomlinson explained that the electric vehicle excise duty (eVED) announced in the Autumn Budget 2025 will function as an additional mileage charge alongside the existing vehicle excise duty (VED). The government maintains this approach will continue to incentivize the switch to electric vehicles while broadening contributions toward road maintenance.

While some have expressed concerns that this new tax might discourage EV adoption, the government insists the plan balances fairness with ongoing incentives for cleaner transport choices.