The UK Treasury is reportedly weighing a national, distance‑based charge for electric vehicles, set at about 3p per mile, as part of fiscal measures being prepared ahead of the 26 November Budget. The proposal is framed as a response to shrinking fuel duty revenues as petrol and diesel sales fall, and would be introduced only after consultation and further design work.
What has been reported
Briefings to the press indicate the levy could begin in 2028, with drivers asked to declare expected annual mileage and reconcile any difference at year end. That approach would avoid live tracking or new in‑vehicle hardware, a choice ministers are said to favour to limit privacy concerns and reduce roll‑out complexity.
Early modelling suggests an average private EV driver could pay roughly £250 a year under a 3p‑per‑mile rate, while hybrid vehicles might face a lower banded charge. Officials argue a distance‑based system would stabilise revenues that currently come from fuel duty and help maintain funding for public services and the road network as vehicle fleets electrify.
Reactions from industry and advocacy groups
Motoring and industry bodies urged caution. The AA warned ministers that an EV‑only levy risks being seen as a "poll tax on wheels", saying the chancellor should “tread carefully” because obstacles to EV adoption remain. The Society of Motor Manufacturers and Traders pointed to recent tax changes that could be depressing new‑car demand, and stressed that consumer incentives will remain important as zero‑emission sales targets tighten.
Charging‑network and equity campaigners focused on distributional effects. EVA England highlighted a widening “charging divide” between drivers with off‑street parking, who can charge at lower cost at home, and those who rely on public chargers where energy prices can be much higher. Vicky Edmonds, CEO of EVA England, said in a public statement, "This is the wrong time to bring in further costs for EV drivers. Our survey data shows that at least half of drivers are still finding the upfront purchase costs of these vehicles to be too high, and that half of EV drivers without driveways are finding their vehicles more expensive to run than their former petrol and diesel cars. These challenges to switching to electric must be addressed urgently, and before any scheme that suggests additional costs is considered."
