The UK will introduce a new tax for electric vehicles and plug-in hybrids from April 1, 2028, calculated according to the distance driven. The charge will be paid in addition to the existing annual vehicle tax.
The new Electric Vehicle Excise Duty, known as eVED, will be 3 pence for every mile driven by fully electric cars. For plug-in hybrids, the rate will be 1.5 pence per mile. At an annual mileage of 16,000 kilometers, this amounts to approximately £300 for an electric vehicle and around £150 for a plug-in hybrid.
The British government explains the change with the decline in revenue from duties on petrol and diesel, which is accelerating as the electric vehicle fleet expands. In the 2024–2025 financial year, these revenues amounted to around £24 billion.
No GPS tracking
Owners will not have to install GPS devices, and the vehicles will not be monitored continuously. When renewing the tax, they will provide the odometer reading and declare the expected mileage for the following period.
Payment may be made in advance or in installments. At the end of the period, the actual distance driven will be compared with the estimate, and the amount will be adjusted. The check will most often be carried out during the periodic technical inspection. For new vehicles that are not yet subject to such an inspection, the odometer reading at the time of tax renewal will be used, with any difference settled at the first inspection.
The measure will apply to all electric vehicles and plug-in hybrids registered in the UK. Initially, vans, buses, motorcycles and heavy goods vehicles will be excluded from its scope.
The system has not yet been finalized
The public consultation on eVED was held between November 26, 2025, and March 18, 2026. It received 5,133 responses. Following the consultation, the government abandoned its proposal for vehicles less than three years old to undergo additional mileage checks, since they are generally not subject to a mandatory technical inspection.
The legislation for the tax has not yet been introduced, but a draft has been prepared to include it in a future finance bill. According to the UK Parliament, the government expects eVED to generate £1.1 billion in the 2028–2029 financial year and £1.9 billion in 2030–2031.
Representatives of the automotive industry warn that the new costs could reduce interest in electric vehicles and slow the transition to lower-emission transport. At the same time, the UK is maintaining its goal of ending sales of new cars powered solely by petrol and diesel engines by 2030, and of ensuring that all new passenger cars and small vans have zero tailpipe emissions from 2035.
Sources: news.bg, theguardian.com, uk.marketscreener.com