Fleet operators have been warned to prepare for a change in timings and substance over the proposed introduction of pay-as-you-drive rules in 2028.

Harvey Perkins of HRUX told delegates at the AFP Annual Conference yesterday (13 May 2026) that the Government has delayed or modified other controversial automotive taxation policies when faced with strong opposition. 

In 2028, the proposal for so-called eVED would charge EV and PHEV users according to the annual mileage they drive at 3p per mile for full EVs and 1.5p per mile for plug-in hybrids.

 Perkins said of eVED: “I keep telling people I don’t think it’s going to happen. I certainly don’t think it’s going to happen within the time period we’ve been given because I don’t really think [the Government] thought through the practicalities of how they’re going to do it. 

“We’ve had a number of policies come out of HMRC over the last two or three years where they were going to change something from a particular date. And then everyone has spoken to the Government about it at length saying it’s going to be very difficult. And then, quite late in the day, they’ve moved the implementation deadline.” 

He pointed to the threshold for the £50,000 Expensive Car Supplement (ECS) in VED for EVs. Chancellor Rachel Reeves had confirmed in November 2024 that EVs would be included in the tax – a legacy policy from the previous administration – from April 2025. 

But in the November 2025 Budget, she announced a retrospective raising of the threshold for EVs to £50,000, giving funders headaches as they had already supplied vehicles and calculated the ECS based on the £40,000 threshold.  

Perkins also highlighted the proposed ending of employee car ownership schemes (ECOS), which have been a valuable tool for vehicle manufacturers to help feed dealer networks with young, low-mileage used cars at the end of their first life cycles through OEM and dealer purchase schemes. The plan to terminate ECO schemes was shelved for three years in 2025.

On eVED, he added that the Government is going to have to establish data sources for mileage records, and when that is agreed, a timetable for the policy will come into force, but his personal view was that it could not be done in time to be introduced in 2028. 

Perkins said it’s understandable that this Government and those in the future would need to recoup revenue it had once received from ICE vehicles as drivers transition to EVs in greater numbers, estimating a potential £4 billion sum missing from coffers, but it was likely to take longer than the current timetable to implement any form of eVED.

Earlier in the session, AFP chair Paul Hollick confirmed that the AFP has been lobbying the Government hard on eVED, and Adam Forshaw, head of communications at the BVRLA, said the tax had been conceived based on single users, and not set up for a fleet ecosystem. 

He added “the BVRLA is being direct about its concerns” in its dialogue with the Government. 

Perkins also warned fleet operators to be prepared for a future realignment of Benefit-in-Kind (BiK) tax beyond the period of the current planned incremental increases. 

He said before electric cars, a 15% BiK tax rate had historically been “low”, but EVs and PHEVs have attracted much lower rates in recent years. He predicted that in the future, the baseline for BiK tax on company cars – even if electric – could return to 15%.