LONDON / RankWire.AI / – The UK government has advanced its plans for an EV mileage-based tax by releasing the consultation response and draft legislation. HM Treasury published these documents on July 13, setting April 1, 2028, as the scheduled rollout date. The initiative, named Electric Vehicle Excise Duty, will impose a per-mile charge in addition to the annual tax already payable on qualifying vehicles. A technical consultation on the proposed clauses will close on Sept. 7, 2026.
Electric and hydrogen fuel cell vehicles will be charged 3 pence per mile traveled. Plug-in hybrid vehicles will pay 1.5 pence per mile, as their petrol or diesel usage also involves fuel duty. These rates are expected to increase in line with consumer price inflation from the 2029-30 tax year. Based on the initial rates, driving 8,000 miles annually would cost an electric vehicle owner £240, while 10,000 miles would amount to £300. This fee will be added to the standard Vehicle Excise Duty.
Vehicle owners will need to submit an odometer reading upon renewing their vehicle tax and also estimate their mileage for the upcoming tax year, typically one year. They can choose to pay the estimated amount upfront or distribute payments throughout the year. The Driver and Vehicle Licensing Agency will compare subsequent odometer readings with initial estimates to determine any balance due. Existing MOT records will assist in verifying readings for vehicles that undergo annual inspections. The process integrates with the current vehicle tax system.
Mileage reporting system to prevent additional inspections
The government has dropped plans for separate mileage checks on vehicles that are not yet due for MOT testing. Instead, owners will report their mileage and provide an annual estimate. The first MOT will serve as a verified reading to compare against previous submissions. Most cars in Great Britain are subject to MOT testing after three years, while in Northern Ireland, it occurs after four years. Authorities may still conduct checks if there is reasonable suspicion of fraud or noncompliance.
This scheme does not involve mandatory tracking devices or recording individual journeys. Kilometers driven outside the UK will count, as the charge is based on total odometer distance traveled. Initially, electric cars, plug-in hybrids, and hydrogen fuel cell vehicles will be included. Electric vans, buses, coaches, and heavy goods vehicles are not part of the initial rollout. Drivers may later opt into an optional system that utilizes mileage data from connected vehicles.
Details of implementation outlined in consultation response
The consultation period lasted from Nov. 26, 2025, to March 18, 2026, receiving 5,133 responses. Most came from individuals (92%), with contributions also from businesses and public agencies. Participants highlighted concerns related to administration, mileage verification, payment flexibility, fleet management, and odometer fraud. The revised plan accommodates fleet operators and leasing firms by allowing estimated readings and bulk licensing, along with more adaptable payment options for organizations managing large vehicle fleets.
Government projections indicate that the tax will affect roughly 5.6 million vehicles during the 2028-29 fiscal year. The Office for Budget Responsibility has estimated revenue at approximately £1.1 billion for that year, rising to £1.435 billion in 2029-30 and reaching £1.865 billion by 2030-31. The implementation process now includes legislation, payment infrastructure, mileage verification, refunds, penalties, and dispute resolution procedures. Vehicle owners will start paying this tax when they renew their vehicle registration after April 1, 2028.