UK May Introduce Pay-Per-Mile Road Tax for Electric Cars

Chancellor Rachel Reeves is rumored to confirm this in the upcoming November budget. This new tax is reportedly being considered to offset the reduction in fuel duty as more drivers are switching to electric vehicles.

 Under the new tax, which was implemented in April this year, drivers who are already charged £195 per year were previously exempt from vehicle excise duty.

 According to The Telegraph, electric vehicle drivers will have to estimate and pay their road usage for the following year. If they travel more miles, they will have to pay an additional amount, but if they travel fewer miles, it will be carried over as a credit to the following year.

The Society of Motor Manufacturers (SMMT) said: "We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK’s EV transition, this would be entirely the wrong measure at the wrong time.

 "Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake," it added.

 AA president, Edmund King, added: “Whilst we acknowledge the Treasury is losing fuel duty revenue as drivers go electric, the Government has to tread carefully unless their actions slow down the transition to EVs.

 "We need to see the detail of this proposal to ascertain whether these new taxes will be equitable or a poll tax on wheels," he added.