Pay-per-mile tax for electric cars (eVED)
The government plans a new tax on electric cars based on how far they drive. It is called electric vehicle excise duty (eVED).
The plan as it stands
- Rate: 3p a mile for fully electric cars, 1.5p a mile for plug-in hybrids.
- Start: April 2028.
- On top of normal vehicle excise duty.
- Status: draft legislation was published in July 2026 for the Finance Bill. It is not law yet, and details could change.
How it would work
You estimate your annual mileage and pay upfront or in instalments with your road tax. At the end of the year your actual mileage is checked and the difference settled. Odometer readings come from the MOT test. Cars under three years old (four in Northern Ireland) don't have an MOT, so they pay on an estimate at VED renewal.
Mileage driven abroad counts too. Cars exempt from VED are not automatically exempt from eVED.
What it costs
| Miles a year | eVED at 3p a mile |
|---|---|
| 5,000 | £150 |
| 8,000 | £240 |
| 10,000 | £300 |
| 15,000 | £450 |
What to do now
Nothing yet. Keep a note of your mileage, and check the House of Commons Library briefing and GOV.UK for updates as the Finance Bill progresses.