The UK Treasury has launched a public consultation on the electric vehicle excise duty (eVED), set to begin in April 2028. Under the proposal, EV and plug-in hybrid drivers would pay 3p per mile alongside existing VED, with rates uprated by inflation, aiming to replace lost fuel duty revenue while keeping compliance simple and preserving privacy.
The UK Treasury has opened a public consultation on introducing an electric vehicle excise duty (eVED), as announced in the Autumn 2025 Budget.
Autumn Budget 2025 announces the introduction of eVED for electric and plug-in hybrid electric cars, which will come into effect in April 2028. Drivers will estimate and pay their mileage with their existing VED payments, a model designed to minimise reporting burdens and protect privacy while supporting a fair transition to electric vehicles.
eVED is intended to replace lost fuel duty revenue from cars over the long term, so, like fuel duty, the amount motorists pay will vary based on the amount they drive. Through the tax design, the government has sought to ensure the system is fair, respects motorists’ privacy and is as simple as possible to comply with. From 1 April 2028, VED on EV and PHEVs will continue to apply alongside eVED on mileage, from the point of their next VED renewal.
The rate of tax will be 3 pence per mile for fully electric cars; this is around half of the 6 pence per mile the average petrol or diesel driver pays in fuel duty. This means, comparatively, EV drivers will continue to pay significantly less tax on the miles they drive. An EV driver accruing 8000 miles per year will pay around GBP 20 per month (GBP 240 annually) in eVED compared to a petrol and diesel driver, who would pay around GBP 40 per month in fuel duty (GBP 480 annually) for the same mileage. The rate will be uprated in 2029-30 and in future years in line with CPI inflation, to ensure that the tax maintains its real-terms value.
According to the document, fuel duty is charged on a per litre basis and in effect taxes miles driven, because those who drive more pay more in fuel duty. It is paid to HMRC by refiners but is passed on and included in the price motorists pay at the pump. The rates on petrol and diesel for the average car equates to around 6 pence per mile; the average petrol and diesel driver pays around GBP 480 per year in fuel duty.
VED is sometimes known as ‘road tax’ or ‘car tax’ and is paid by owners of vehicles driven or kept on public roads. There are different rates which apply to cars, vans and motorcycles based on vehicle type and other factors, including age and emissions; EVs and PHEV cars have been subject to VED since April 2025.
Cars registered since 2017 are subject to a standard annual rate after the first year of registration, which is currently GBP 195.
For the first year of registration, rates vary depending on emissions: EVs will continue to enjoy a first-year rate of GBP 10 until at least 2029-30, whereas more polluting cars pay higher first-year rates.
The consultation closes on 18 March 2026.
