The per-kilometre tax on electric cars is dividing the UK
One of the Starmer government’s final measures is the introduction of a levy from April 2028 to make up for the shortfall in excise duty revenue. Critics say this will act as a disincentive to going green
LONDON – One of the Starmer government’s legacies is causing a stir in London: the announcement that a road tax on both new and used electric vehicles will be introduced from April 2028. Electric cars will have to pay three pence per mile travelled (around two cents per kilometre), whilst the charge for hybrid cars will be halved to 1.5 pence per mile. Electric vans, buses and lorries will be exempt from the new tax, at least initially.
In the coming years, the tax will rise in line with inflation and is expected to raise £1.2 billion a year for the Treasury, partly offsetting the revenue lost as a result of the increase in the number of electric cars on the road.
The Government argues that the system known as eVed (electric vehicle excise duty) rectifies an injustice, given that electric car drivers have not, until now, been subject to tax, unlike motorists who pay fuel duty every time they visit a petrol station to fill up. The tax on electric vehicles is around half that paid by drivers of diesel or petrol cars.
The Government has dismissed criticism that the measure is counterproductive because the additional costs act as a disincentive to buying electric cars, which the authorities would, in theory, like to encourage.
Motorists will be required to provide their odometer reading when renewing their annual roadworthiness certificate and to estimate their expected annual mileage. If they exceed the threshold, they may be required to make additional payments; if, on the other hand, they use their car less than expected, they will be able to carry over any credit to the following year.
