The Government has opened a consultation on its plans for a new EV pay-per-mile tax, as announced by the Chancellor in today’s Autumn Budget.

Open until 11:59pm on 18 March 2026, the consultation sets out further detail on how the Electric Vehicle Excise Duty (eVED) will work and seeks views on its design and implementation.

Widely trailed weeks ahead of the Budget, the EV road user charge will be implemented from April 2028 to help counter declining fuel duty revenue as drivers switch to EVs.

For 2028/29, the EV charge will be set at 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrid cars, with the rate per mile increasing annually with CPI. Electric commercial fleet vehicles will be excluded.

The charge will be levied in addition to the current vehicle excise duty (VED) charges paid by all vehicles; as of 1 April 2025, electric vehicles are liable for VED and the Expensive Car Supplement.

The Government has said that it is fair for EV drivers to contribute for their car usage in the same way as those driving petrol and diesel cars – but added that it’s committed to ensuring that driving an EV remains an attractive choice for consumers and therefore the tax paid by EV drivers will be around half the fuel duty rate paid by the average petrol/diesel driver, with a reduced rate for plug-in hybrid drivers.

When eVED takes effect in April 2028, an average EV driver will pay around £240 per year or £20 per month.

Other vehicle types, such as vans, buses, motorcycles, coaches and HGVs, will be “out of scope” of eVED when it is introduced, due to “the transition to electric power for these vehicle types being currently less advanced than for cars”. This implies however that eVED could be levied on such vehicles in the future.

The Treasury has said that the revenue generated from eVED will support investment in maintaining and improving the condition of roads across the country. By 2029/30, the Government will commit over £2bn annually for local authorities to repair, renew and fix potholes on their roads – doubling funding since coming into office and enabling the Government to exceed its commitment to fix an additional one million potholes per year.

The Treasury added that the implementation of eVED will provide revenues for this new higher level of roads maintenance funding to be continued for the long term.

In the Budget statement, the Government said it was protecting motorists’ privacy, which means that there will be no requirement to report where and when miles are driven or install trackers in cars. Instead, car drivers will pay for the miles they drive alongside paying their usual road tax.

New mileage estimation and reporting requirements, and payments for eVED, will be integrated into the existing VED system, to minimise administrative burdens for motorists. Integration with VED means most motorists will only be required to interact with the system once per year and through familiar channels. VED is administered by the DVLA, who will also administer eVED.

Alongside paying their VED each year, under eVED, motorists will estimate their mileage for the year ahead, pay an upfront charge based on their estimate or spread their payment across the year, and then submit their actual mileage at the end of the year to trigger a reconciliation. Motorists will have their mileage checked annually, typically during their MOT as is already the case, or for new cars, around their first and second registration anniversary.

The Treasury added that it will work closely with industry and motoring representative groups on the delivery of the new tax.

The Government has said that motoring taxation is long overdue for reform. Without change, around one in five car drivers are expected to pay no fuel duty at all by 2030, while other motorists will continue to contribute an average of £480 a year.

“Given all cars cause congestion and wear and tear on the roads, this is not a fair outcome,” the consultation document states.

It also points out that fuel duty revenues are expected to fall by around half – to around £12bn per year in the 2030s.

And the consultation document says Budget 2025 includes measures worth £3.6bn which will make electric cars and charge points more accessible and “back the British automotive sector to build the electric vehicle models of the future”. Changes include more money for the Electric Car Grant and charging, a consultation on permitted development rights for cross‑pavement EV charging and extended funding for the Drive35 programme. The Government is also raising the threshold at which new EVs pay the VED Expensive Car Supplement and delaying changes to Benefit-in-Kind rules for Employee Car Ownership Schemes until April 2030.

But the industry reaction to the new EV tax remains generally very negative.

Ross Palman, project lead – EV at Holman, said eVED could actually hinder electrification if implemented poorly.

“In its current form, the eVED consultation suggests that drivers, leasing companies, and employers may all require separate processes for estimating, paying and validating mileage. This risks adding complexity, administrative burden and confusion before even considering the impact on running costs. As a funding and fleet management business committed to delivering transparency and trust for our customers, we are eager to work with the Government to design a system that fairly taxes electric vehicles without compromising progress toward decarbonisation.”

Paul Hollick, chair of the Association of Fleet Professionals (AFP), called for a conversation across the fleet sector about what the industry wants from such a scheme in terms of its timetable and implementation. He added that the AFP expects to take a central role in such dialogue.

“Initially, our main concern is that it shouldn’t arrive in a form that could hamper electrification or cause any hesitation among potential business and private EV buyers. We’re looking at a point two-and-a-half years away, which at least creates time and space for serious discussion.”

But Toby Poston, chief executive of the BVRLA, said the plans were “poorly timed and very problematic to implement”.

“In its current form, this retrospective tax will punish existing EV users and provide yet another deterrent to those considering the move,” he added.

To respond to the eVED consultation, please click here. The consultation closes at 11:59pm on 18 March 2026.