UK confirms pay-per-mile tax for electric cars from April 2028

The government will introduce an Electric Vehicle Excise Duty system from April 2028, charging EV drivers 3p per mile and plug-in hybrids 1.5p per mile based on annual odometer readings. Following a consultation with over 5,000 responses, the scheme will apply to electric cars but exempt electric vans, with rates set at roughly half the equivalent fuel duty paid by petrol drivers. The mileage-based charge will run alongside existing road tax to replace fuel duty revenue as motorists switch to electric vehicles.

Why it matters: The new tax structure will affect total cost of ownership calculations for fleet operators and workplace charging schemes from 2028, potentially influencing procurement decisions for electric vehicles and the business case for charging infrastructure investments. CPOs serving commercial fleets may need to adjust pricing models and customer communications as operating costs for electric vehicles shift from fuel savings to mileage-based taxation.