Andy Burnham's EV per‑mile tax could push UK drivers' annual costs above £800

The UK government under Prime Minister Andy Burnham is confirming a pay‑per‑mile vehicle excise duty for electric cars. The scheme, first announced by former Chancellor Rachel Reeves, sets a charge of 3 p per mile driven. For an average driver covering about 7,400 miles a year, the tax amounts to roughly £222, which together with the standard VED brings total annual costs to around £422. Drivers of higher‑priced EVs—those priced over £50,000, such as many Tesla, BMW and Mercedes models—face an additional supplement that can raise their bill to over £800.

A separate calculation shows that a driver travelling 15,000 miles would incur a £450 charge under the same rate. Industry groups including BEAMA, EVA England and the Society of Motor Manufacturers and Traders have warned that the early implementation (scheduled for April 2028) could dampen consumer confidence, curb EV uptake and create difficulties for leasing firms and fleet operators. The government says the rate will be uprated in line with inflation after 2029‑30, but critics call for a delay to provide stability for the EV transition.