# UK Government Plans Digital Pay-Per-Mile Tax for Electric Vehicles New mileage-based levy aims to offset declining fuel duty revenue starting April 2028. - **Source:** [iNews](https://inews.co.uk) - **Published:** 2026-11-07 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/a534db71-1749-4632-9a25-41955e1454f0 ## New Mileage Taxation Policy The UK government is introducing a pay-per-mile tax for electric and plug-in hybrid vehicles. Revealed in recent budget documents, this policy aims to replace lost revenue from traditional fuel duties. Owners will be required to provide accurate mileage estimates to the DVLA to calculate their annual tax obligations starting from April 2028. ## Revenue Decline and Motivation Fuel duty currently generates approximately £24 billion annually for the government, taxing petrol and diesel drivers at 52.95p per litre. As more motorists transition to electric vehicles, this revenue stream is shrinking. The new levy ensures that electric vehicle owners contribute to road maintenance costs, similar to traditional internal combustion engine vehicle drivers. ## Digital Tracking Mechanisms The government plans to utilize an opt-in system called eVED Connect to monitor vehicle mileage. This system leverages in-built internet connectivity and GPS found in modern electric and hybrid models. Officials state that no additional trackers will be installed, and the system will not record specific locations or the timing of journeys. ## Manual Reporting and Verification Drivers who choose not to use the digital connectivity system can submit their mileage readings manually. To ensure accuracy, authorities will cross-reference these figures with data collected during annual MoT tests. If a discrepancy is found where actual mileage exceeds the reported estimate, owners will be required to pay the outstanding balance. ## Projected Annual Costs The tax is set at 3p per mile for fully electric vehicles and 1.5p for plug-in hybrids. For a driver covering 10,000 miles annually, this equates to a yearly cost of £300 for electric cars and £150 for hybrids. These rates apply uniformly to both new models and older, first-generation electric vehicles. ## Impact of Road Tax Beyond the pay-per-mile charge, owners must still pay standard road tax, which varies based on vehicle registration dates. Most electric car owners face a £200 road tax fee for 2026/27. Additionally, vehicles registered after April 2025 with a list price exceeding £50,000 will incur an extra £440 annual charge for five years. ## Scope of the Levy The current legislative proposal specifically targets electric cars and plug-in hybrids. Electric vans are currently excluded from these pay-per-mile requirements. This distinction highlights the government's focus on passenger vehicle usage as the primary target for replacing the fiscal gap left by the long-term decline in traditional petrol and diesel fuel consumption. ## Future Fiscal Implications As the UK moves toward a zero-emission transport future, the government faces a significant fiscal challenge regarding road infrastructure funding. This pay-per-mile model represents a fundamental shift in how road usage is taxed. Observers should monitor how this digital reporting system evolves and whether it sets a precedent for future transport taxation. ## Sources covering this story - https://inews.co.uk/news/pay-per-mile-tax-pay-electric-vehicles-hybrid-4874470 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._