UK Pay-Per-Mile Road Tax 2028: What EV & Hybrid Drivers Need to Know
The UK is introducing a new pay-per-mile tax system for electric and hybrid vehicles. From April 2028, drivers of zero-emission and plug-in hybrid cars will pay the new Electric Vehicle Excise Duty (eVED) based on miles driven.
Here's what we know so far about this significant change and how it affects UK drivers:
- 3p per mile — confirmed rate for fully electric vehicles from April 2028
- 1.5p per mile — confirmed rate for plug-in hybrid vehicles from April 2028
- £240 annually — estimated cost for EV drivers covering 8,000 miles per year
Why the government is introducing pay-per-mile tax
The new Electric Vehicle Excise Duty is designed to replace lost fuel duty revenue as more drivers switch to electric vehicles. Currently, fuel duty generates around £24.4 billion per year for the Treasury, but this is expected to drop to around £12 billion annually in the 2030s as EV adoption increases.
Traditional petrol and diesel drivers currently pay around 6 pence per mile through fuel duty. The new eVED system ensures EV drivers contribute fairly to road maintenance and infrastructure costs while maintaining the government's commitment to encouraging cleaner transport.
The policy aims to create a sustainable funding model for road infrastructure that doesn't penalise the shift to electric vehicles but ensures all drivers contribute to the costs they create.
Confirmed rates and timeline
The government has confirmed the basic framework for eVED after extensive consultation that closed in March 2026. Fully electric cars will pay 3 pence per mile, whilst plug-in hybrid vehicles will pay 1.5 pence per mile.
These rates will apply from April 2028 to all UK-registered EV and PHEV cars. The government expects eVED to generate approximately £1.1 billion in 2028/29, rising to £1.9 billion by 2030/31 according to Office for Budget Responsibility estimates.
eVED will be paid alongside existing Vehicle Excise Duty (VED), not as a replacement. From April 2025, zero-emission cars already pay standard VED rates of £200 per year (for 2026/27), ending their previous exemption.
How mileage will be tracked and verified
The government has confirmed that mileage will be checked annually, typically during MOT tests for cars over three years old. This represents a significant shift towards regular mileage verification for tax purposes.
For vehicles under three years old that don't yet require an MOT, specific details on mileage verification haven't been confirmed. The system is expected to work on an estimate-and-reconcile basis, where drivers estimate their annual mileage and pay upfront, then submit actual mileage at year-end for adjustment.
Importantly, the government has confirmed it will not mandate in-built vehicle telematics for eVED administration, prioritising driver privacy. However, they're considering how various technologies could be used on an opt-in basis to simplify the system in future.
What vehicles are affected
The new tax applies to all UK-registered electric and plug-in hybrid cars from April 2028. Electric vans, buses, motorcycles, and Heavy Goods Vehicles (HGVs) will not be subject to eVED at its introduction.
This creates an interesting distinction where commercial electric vehicles remain exempt whilst private electric cars enter the tax system. The government may extend eVED to other vehicle types in future, but no timeline has been announced.
Cars first registered before April 2028 will be included in the new system, so current EV owners shouldn't expect grandfathering provisions.
Changes to existing VED for EVs
Alongside eVED preparation, several VED changes have already taken effect. From April 2025, zero-emission cars lost their VED exemption and now pay standard rates.
New zero-emission cars registered from April 1, 2025, pay £10 for their first year, then £200 per year from the second year onwards. Cars first registered between April 2017 and March 2025 moved straight to the £200 annual rate from April 2025.
The government has increased the threshold for the VED Expensive Car Supplement for zero-emission cars from £40,000 to £50,000, providing some relief for higher-value EVs. This change applies to zero-emission cars first registered from April 1, 2025, for licences taking effect from April 1, 2026.
Planning for accurate mileage tracking
With annual mileage verification becoming a tax requirement, accurate record-keeping becomes essential for all EV and hybrid drivers. Manual logbooks are prone to errors and gaps that could lead to disputes or overpayment.
Automatic mileage tracking apps like MileEZ can capture every journey with GPS precision, creating audit-ready records that satisfy tax requirements. This becomes particularly valuable when dealing with mixed business and personal use, where accurate categorisation affects both eVED liability and business expense claims.
The new system creates additional complexity for lease drivers, who already need to monitor mileage against contract limits. Combining lease overage tracking with tax mileage requirements demands robust systems that can handle multiple reporting needs.
Preparing for 2028
While legislation for eVED hasn't yet been introduced, the government consultation has closed and key details are confirmed. Rates are expected to increase annually with inflation, making current planning estimates conservative.
Current EV drivers should begin establishing reliable mileage tracking habits now, even before the 2028 launch. This creates a historical baseline and ensures systems are working correctly when tax obligations begin.
Fleet managers and businesses with EV company cars need to consider how eVED affects total cost of ownership calculations and whether current tracking systems can handle the additional tax reporting requirements.
Impact on EV adoption
The Office for Budget Responsibility estimates that eVED will lead to approximately 440,000 fewer EV sales over the forecast period. However, the government expects manufacturers to offset this by reducing prices to maintain sales targets.
The policy creates a more level playing field between electric and traditional vehicles whilst maintaining the environmental incentive through lower per-mile rates for EVs compared to current fuel duty levels.
This balanced approach aims to sustain EV growth whilst ensuring fair contribution to infrastructure costs.
Track every mile with MileEZ
With pay-per-mile taxation arriving in 2028, accurate mileage tracking becomes essential for every EV and hybrid driver. MileEZ automatically detects and records every journey, creating tax-ready reports that satisfy HMRC requirements whilst helping lease drivers avoid expensive overage charges.
Whether you're preparing for eVED, claiming business mileage, or managing lease limits — MileEZ keeps your miles organised and your costs under control.