New pay per mile rule to hit certain UK drivers with £210 in fees every year – My London
The new charge will come in from April 2028
Drivers of EVs and hybrids should prepare for the new charge(Image: EF Volart via Getty Images)
What is the new pay-per-mile charge and how will it work?
Certain UK motorists will face an average annual bill of £210 under a new pay-per-mile charge set to be introduced.
Chancellor Rachel Reeves revealed in her Budget that, from April 2028, electric vehicle drivers will be hit with a 3p-per-mile road charge, which will rise each year in line with inflation.
Based on Department for Transport figures showing the average UK car travels 7,000 miles annually in 2024, EV drivers can expect to pay £210 per year. Those who drive more than the average will face even higher costs under the new road tax system.
Plug-in hybrid drivers will also be affected by the new tax. It is expected that drivers of hybrids can expect to pay an extra £120 a year in tax, if they cover about 8,000 miles per year.
The Office for Budget Responsibility estimates the charge will generate £1.1 billion in 2028-29, rising to £1.9 billion by 2030-31.
The OBR has warned that the charge is “likely to reduce the demand for electric cars as it increases their lifetime cost”.
The charge is being introduced in part due to a decline in fuel duty revenue generated by the Government as electric cars have gone up in popularity.
It is expected that drivers will have to estimate their mileage at the start of the year, according to carwow.co.uk, and then their actual mileage will be recorded at their annual MOT.
If drivers clock up fewer miles than estimated, experts believe they may get credit towards next year’s charge. For cars under three years old that do not require an MOT, they may still need to go for a yearly mileage check to record distance travelled.
According to the RAC, approximately 1.4 million zero-emission Battery Electric Vehicles are currently on UK roads, alongside around 777,000 plug-in hybrids.
The OBR predicts the pay-per-mile tax could reduce EV sales by 440,000, though the actual drop is likely to be closer to 120,000 due to other incentives announced in the Budget, reports the Express.
Read the full story: UK 3p pay-per-mile driving rule plans latest as Rachel Reeves handed backing
