New EV tax in the UK: You pay based on kilometers driven

What is the new eVED tax?

From April 2028, the UK is introducing a new tax – Electric Vehicle Excise Duty (eVED), which will be based on distance traveled. The measure affects both fully electric vehicles and plug-in hybrids.

The rate is set at 3 pence per mile for electric vehicles and 1.5 pence for hybrids, with amounts to be adjusted annually in line with inflation.

Payment mechanism

• Owners will declare an expected annual mileage.
• At the end of the year, the actual mileage will be recorded – if exceeded, an additional payment is due; if the mileage is lower, a credit is received.
• Option to pay in a lump sum or in monthly installments.

Why is this tax being introduced?

The main goal of the British authorities is to compensate for the loss of fuel excise duty revenue. Since electric vehicles do not use petrol or diesel, they do not contribute to the treasury in the same way, even though they wear out road infrastructure to the same extent as other vehicles.

Global trends

The UK is not the first country with such an initiative. New Zealand is already implementing mileage-based taxation, and similar discussions are taking place in Iceland and dozens of US states as governments around the world seek sustainable ways to fund the road network amid the growing number of electric vehicles.