Per-mile EV tax in UK: vans exempt, plug-in hybrids included

UK introduces per-mile charge for electric vehicles from 2028, with vans exempt and plug-in hybrids paying reduced rates, according to The Times and Financial Times.

Plans for a new pay-per-mile tax on electric vehicles in the UK are becoming clearer, with reports suggesting drivers will be charged about 3 pence per mile starting in 2028. The measure is designed to offset falling fuel duty revenues as more motorists switch to zero-emission cars.

Chancellor Rachel Reeves is expected to outline the scheme in the autumn budget. According to reports in The Times and Financial Times, EV owners will estimate their annual mileage and make an upfront payment alongside their vehicle excise duty (VED). If they drive more than expected, they will top up; if less, the remaining credit will carry over to the next year.

One of the most notable aspects is that electric vans are expected to be exempt from the charge. The exemption is meant to support commercial operators and encourage the electrification of fleet vehicles. Plug-in hybrid (PHEV) drivers, however, will not escape — they will be charged at a reduced rate but still face fuel duty costs.

Industry sources estimate that the policy could cost an average EV driver around £250 a year. Examples cited by Car Dealer Magazine include roughly £12 for a journey from London to Edinburgh and £2 from Liverpool to Leeds.

Government officials argue the tax is part of a fairer system for funding roads and infrastructure. “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles,” a Treasury spokesperson said, stressing that the policy will accompany continued support for EV adoption.

Reactions from the motoring community have been mixed. The AA has criticised the proposal as a “poll tax on wheels,” warning it could slow the UK’s electric transition. Yet others, including fleet analysts, see an upside: the van exemption could accelerate the electrification of commercial transport.

Several details remain unresolved — the exact rate for PHEVs, how mileage will be verified, and how the levy will align with existing road taxes. Consultations are expected to continue through 2026 and 2027, with implementation targeted for 2028.