LONDON / RankWire.AI / – The UK government has progressed with plans for a mileage-based tax on electric vehicles by releasing its consultation feedback and draft legislation. HM Treasury published these documents on July 13 and confirmed an implementation date of April 1, 2028. The draft provisions are now subject to a technical consultation that will close on September 7. The new charge, named Electric Vehicle Excise Duty, will run alongside the existing Vehicle Excise Duty paid by motorists.
Battery-electric and hydrogen fuel cell vehicles will be taxed at 3 pence per mile. Plug-in hybrid vehicles will be charged at 1.5 pence per mile due to their use of petrol or diesel and the accompanying fuel duty. An electric car driving 8,000 miles annually would face a charge of £240, while a driver covering 10,000 miles would pay £300. The government intends to increase these rates in line with consumer price inflation starting from the 2029-30 tax year.
When renewing their yearly vehicle tax, drivers will need to report their odometer reading and also estimate their upcoming mileage, which typically covers one year. Motorists can choose to pay the estimated fee upfront or opt for installment payments over the year. A subsequent odometer reading will enable the DVLA to reconcile the estimate with actual mileage. The agency will utilize existing MOT mileage records where accessible and adjust payments accordingly.
Mileage reporting replaces additional inspections
A previous proposal requiring newer electric vehicles to undergo separate annual mileage inspections has been abandoned by the government. Vehicles generally do not need an MOT during their first three years, or four years in Northern Ireland. Instead, owners will report mileage and provide estimates at each tax renewal, with the first MOT providing a verified reading for comparison. The DVLA retains the authority to order an official mileage check if there are reasonable suspicions of fraud or noncompliance.
This system will not involve tracking devices or gather data on individual trips. It also will not vary charges based on the location or time of travel. Consequently, mileage accumulated abroad by UK-registered vehicles will count toward the tax. The scheme applies to battery-electric, plug-in hybrid, and hydrogen fuel cell vehicles. Electric vans, buses, coaches, and heavy goods vehicles will remain outside its initial scope. Mileage reporting through connected cars will also remain optional.
Feedback influences the final tax framework
During the consultation period from November 2025 to March 2026, HM Treasury received 5,133 responses. Of these, 92% came from individuals. Concerns raised included administrative burdens, verifying mileage, potential fraud, overseas travel, and impacts on fleet operators. The government responded by streamlining processes for leasing and rental companies, including estimated readings, bulk licensing, and more flexible payment options. Authorities will also develop guidance and tools to assist drivers in estimating annual mileage.
Approximately 5.6 million vehicles are expected to be affected in the 2028-29 fiscal year, according to the government’s impact assessment. The Office for Budget Responsibility projects revenues of £1.1 billion for that year, rising to £1.44 billion in 2029-30 and £1.87 billion in 2030-31. Preparations for implementation will include updates to DVLA systems, payment procedures, mileage verification, refunds, penalties, appeals, and dispute processes before the electric vehicle mileage tax is introduced.