Drivers of electric vehicles (EVs) may soon face a new tax as the Government seeks to raise billions in additional revenue. According to reports, ministers are discussing a potential pay-per-mile levy to replace the falling income from fuel duty.
A BBC report confirmed that “conversations” have taken place within Government about introducing a new system for EVs. A spokesperson said: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles. We want a fairer system for all drivers.”
The Daily Telegraph suggested the Budget could include a 3p-per-mile charge for EVs, with hybrid drivers paying slightly less. That would add around £12 to a journey from London to Edinburgh. Under the proposal, motorists would estimate their annual mileage and pay in advance, receiving either a credit or a top-up at the end of the year, depending on their actual usage.
Electric cars ceased to be exempt from vehicle excise duty earlier this year, following a change announced in the 2022 Budget. However, the Government insists it still supports the shift to greener transport, citing £4bn in funding and grants of up to £3,750 per eligible vehicle.
AA president, Edmund King, warned ministers to “tread carefully unless their actions slow down the transition to EVs.” He also said more detail was needed to assess whether the proposed system would be fair, or a poll tax on wheels.”
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