Labour provides major update on pay-per-mile car tax changes launching soon

The former Chancellor outlined that electric vehicle owners would be required to pay 3p for every mile driven, while hybrids would pay 1.5p.

Pay-per-mile measures were being introduced to combat dwindling receipts from fuel duty as millions of drivers prepare to invest in electric vehicles.

The move was met with strong criticism for harming the uptake of electric cars at a critical time when drivers are still making the transition to zero emission vehicles.

Fresh details from the Government on the future of Electric Vehicle Excise Duty will provide greater clarity for motorists who are concerned about pay-per-mile.

The Government will introduce a mileage estimation tool to support motorists that will be available at launch in April 2028.

It is currently undertaking proof-of-concept work to ensure features, including benchmarking, will help motorists when the taxes are fully rolled out.

An opt-in system will also be included to make use of the in-built connectivity of vehicles entitled “eVED Connect”.

This will allow motorists to use the connectivity of the vehicle, rather than having to report their mileage manually.

Budget documents state the Government’s desire to use the technology to support mileage estimation for the coming year.

A deadline of 2030 has been set to develop an automated refunds model to make it easier for motorists to claim if they are owed money.

This is expected to be made for a range of circumstances, such as overestimating mileage or if someone has sold their car.

Labour clarified that it would work closely with industry and motoring groups ahead of the rollout of the pay-per-mile taxes.

It also pledged to provide further guidance for fleet operators later this year before the rules come into force in April 2028.

The Government provided £100million in relief for electric vehicle owners in this year’s Budget to address high public charging costs following a report which highlighted the dramatic difference in costs between home and public charging.

Ben Nelmes, CEO of New AutoMotive, said: “It is not fair that people who cannot charge their electric car at home must pay significantly more for their electricity.

“It is good to see the Chancellor taking steps to allow drivers to use their home electricity tariff at their local charge point. It is vital that this work moves at pace to end Britain’s driveway divide.”

Electric Vehicles UK CEO Tanya Sinclair added that the Government should not appear to be helping EV drivers with one hand and “making the transition to electric harder and more expensive with the other”.

“Electric motoring is already helping drivers escape volatile pump prices, and many more could benefit if the Government tackled the policy barriers keeping public charging unnecessarily expensive, particularly for those without driveways,” she said.