New tax will apply to owners of certain cars
10:56, 09 Feb 2026Updated 08:40, 13 Feb 2026
Rachel Reeves has announced the new tax.(Image: Anadolu via Getty Images)
A new tax has been confirmed for motorists who use driveway or public charging points to boost their electric vehicles (EVs).
EV owners will see running costs surge by hundreds of pounds, in a fresh cost-of-living blow.
Chancellor Rachel Reeves has announced the controversial pay-per-mile tax, which will target owners of EVs and plug-in hybrids.
READ MORE: Rachel Reeves confirms new £300 charge for drivers who do 10,000 miles a year
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It will see these motorists charged based on how much they travel.
A 3p-per-mile fee will apply to drivers of EVs, and 1.5p-per-mile for plug-in hybrids.
The 3p rate means someone doing 10,000 miles a year would have to pay £300.
The average Brit covers 8,500 miles over a year – though millions do much more than that.
It’s sparked claims those who face long commutes or live in rural areas will be unfairly targeted.
But ministers point out petrol and diesel drivers are already charged in this way through fuel costs and duty.
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Falling fuel duty as more motorists switch to electric has prompted the move.
The new tax will not come into force until April 2028.
Treasury minister Dan Tomlinson outlined the Government’s plans saying: “At autumn Budget 2025, the Government announced the introduction of Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028.
“Drivers will pay for their mileage alongside their existing Vehicle Excise Duty (VED).”
A consultation document on the new pay-per-mile charge states: “It will be set at half of the equivalent rate of fuel duty for electric cars, and half again for plug-in hybrid cars.
“eVED will ensure all car drivers contribute, but will still maintain important incentives to switch to an electric vehicle.
“eVED will not require ‘trackers’ in cars, nor will the Government ask people to interact with a whole new tax system: car drivers will pay for the miles they drive alongside paying their usual road tax (VED).”