UK to Introduce Mileage Tax on Electric Vehicles from 2028

mileage tax electric vehicles UK fuel tax revenue eVED

The British government has confirmed a new mileage‑based levy for electric cars and plug‑in hybrids that will take effect in 2028. Pure‑electric vehicles will be charged three pence per mile, while plug‑in hybrids will pay 1.5 pence per mile, on top of the existing Vehicle Excise Duty. The tax is intended to offset the decline in fuel‑tax revenues as EV adoption grows.

The system, called the Electric Vehicle Excise Duty (eVED), will rely on self‑reported odometer readings submitted during the annual vehicle inspection (MOT) rather than GPS tracking. Payments will be made through the DVLA website, with options for yearly, semi‑annual or monthly installments and possible refunds. Electric vans, buses, heavy trucks and certain special‑purpose vehicles are initially exempt, and London has softened some originally proposed reporting requirements.

The scheme is the first nationwide mileage levy for EVs and is being watched by other countries as a possible model for addressing the fiscal gap created by the shift away from fossil‑fuel vehicles.