Rural drivers could be confronted with a punishing ‘postcode penalty’ under the Government’s planned pay-per-mile road tax, with soaring annual bills eclipsing those in central London, new analysis reveals.

Commissioned ahead of the Treasury’s planned introduction of Electric Vehicle Excise Duty (eVED) in 2028, the study by the British Vehicle Rental and Leasing Association (BVRLA) and research firm New AutoMotive maps the financial toll of the proposed 3p-per-mile tax across every UK constituency.

While urban areas with dense EV fleets – such as Brent East – will generate the highest total tax revenue (£7.6m), it is rural motorists who bear the most severe individual burden.

Key findings include inflated annual bills for motorists in high-mileage, low-fleet areas such as Caithness, Sutherland and Easter Ross, plus South West Norfolk, where drivers face annual costs of £247-£260 each.

This rural cost is more than three times the £79 annual bill paid by drivers in the Cities of London & Westminster – due to the simple fact that rural drivers travel further, have fewer alternatives and will pay more overall as a result.

The study also warns of compounding penalties; the constituencies least exposed to the new tax enjoy the best public transport and charging infrastructure, while the worst-hit areas are completely underserved.

The findings expose what campaigners are calling an ‘EV postcode penalty’: a system structurally weighted against drivers least able to reduce their mileage and least likely to have access to the public transport, charging infrastructure, or household income that would make EV ownership straightforward.

The Government warns that without action for EVs, one in five drivers will pay no fuel duty by 2030, while others continue to contribute £480 a year. Since all cars cause congestion and road wear, this inequality needs fixing.

However, industry leaders warn the flat pay-per-mile rate is structurally unfair. At 3p per mile for the proposed pence-per-mile eVED rate for full EVs, annual bills will vary enormously depending not on how much a driver earns, or how much they pollute, but simply on where they live.

Campaigners warn that rural motorists are being penalised for long journeys to reach essential services such as supermarkets and GP surgeries, often in areas with limited public transport and limited charging infrastructure.

Toby Poston, chief executive of the BVRLA, said: “A flat pay-per-mile charge might look fair on paper, but its burden falls hardest on the drivers least able to avoid it. People who live in less connected areas don’t drive more because they want to: they drive more because they have no choice. Under these proposals, a driver in Caithness or rural Norfolk will pay three times the annual road tax of someone in central London… That is not a fair system.”

Electric vehicle advocacy groups echo these concerns.

Tanya Sinclair, CEO of Electric Vehicles UK, described the geographical divide as “the opposite of a fair transition,” noting that EV drivers are being hit while fuel duty for petrol and diesel cars remains frozen, as confirmed by the Government.

Those involved in the research also warned that the eVED policy is already denting public confidence. A national survey by Electrifying.com and the AA revealed that 55% of drivers believe pay-per-mile road charging would make them less likely to switch to an EV.

With rural communities suffering from a double penalty of longer journeys and a stark lack of public chargers, the BVRLA is urging the Government to scrap its current proposals.

While the Government’s consultation on its eVED proposals closed mid-March, the BVRLA has also called on fleets to take action by sharing the sector’s concerns with MPs.

Fleets can contact their local MP with a prewritten letter using a form here. The process takes just minutes and will ensure MPs are aware of the challenge that eVED poses to the sector and their constituents.