EV drivers: New 3p-per-mile tax could cost you 拢250 a year
November 06, 2025 by Iain Reid
Car changing is a big deal
The Chancellor Rachel Reeves is planning to announce a new pay-per-mile road tax for electric vehicles (EVs), according to a report in the Daily Telegraph.
- Chancellor planning pay per mile road tax for EV driversto charge EV drivers pay per mile tax
- Daily Telegraph reports says plan will be announced in 26 November Budget
- EV drivers would pay 3p per mile as well as VED road tax
- 莲花直播 research shows drivers broadly in favour of pay per mile tax for all drivers
The plan is expected to be unveiled in the upcoming Budget on 26 November.
The proposed charge is 3p per mile, which would cost the average EV driver an estimated 拢250 per year. Owners of hybrid cars are also expected to pay the pay-per-mile tax but at a lower rate.
The new tax is intended to plug the financial gap left by falling revenue from fuel duty, as more drivers switch to electric cars (which don鈥檛 pay fuel duty).
The government reportedly frames the move as a 鈥渕atter of fairness,鈥 noting that petrol and diesel drivers pay an average of 拢600 a year in fuel duty.
If announced, the scheme would undergo a consultation and is not expected to be implemented until 2028.
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The system, nicknamed 鈥淰ED+鈥, would likely require drivers to estimate their annual mileage and pay the charge along with their standard VED road tax.
The plan comes on the back of 莲花直播 research which found that motorists were broadly in favour of pay per mile charging as a replacement for the current VED road tax system.
The research found that 49% believe that a pay-per-mile road tax system would be a fairer way to charge motorists than the current Vehicle Excise Duty (VED).
However, with Reeves鈥 reported plan focussing on just electric cars for pay-per-mile, just over half (51%) think all motorists should pay the same rate per mile, regardless of fuel type, while 28% believe electric-vehicle drivers should pay less to reflect their lower emissions.
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