At the Autumn Budget 2025, the government announced that electric vehicle excise duty (eVED) will be introduced from April 2028. Further details were provided in a consultation document, with views sought on the design and implementation of eVED by 18 March 2026.  

Background

The two primary motoring taxes in the UK are: 

• vehicle excise duty (VED, also referred to as road tax), which is a tax on vehicle ownership; and 
• fuel duty, which is payable on petrol, diesel and other fuels. 

Electric vehicle cars and plug-in hybrid electric vehicle (PHEV) cars have been subject to VED since April 2025. 

The government’s receipts from fuel duty are expected to reduce significantly as take-up of electric vehicles increases. The government hopes that eVED will protect tax revenues in a way that does not discourage the transition to electric vehicles. 

Scope

Based on the details provided in the consultation document, UK-registered electric vehicle and PHEV cars will be in scope of eVED from April 2028. Other vehicle types, for example, vans, buses, motorcycles, coaches and heavy goods vehicles, will not be in scope of eVED when it is introduced in April 2028. 

For the avoidance of doubt, mileage driven overseas by UK registered cars will fall within the scope of eVED. 

Rate 

eVED rates for 2028-29 are expected to be: 

• 3p per mile for electric vehicle cars; and
• 1.5p per mile for PHEV cars. 

The rates will increase in line with inflation in 2029-30 and in future years. 

PHEV cars are subject to a reduced rate of eVED as they will continue to pay fuel duty. 

Process

eVED will be administered by the Driver and Vehicle Licensing Agency (DVLA) with reporting and payment integrated into the existing VED system.  

It is expected that the motorist will be required to: 

• estimate their mileage for the year ahead when paying VED. The motorist will have the option of paying an upfront charge based on that estimate or spreading their payment across the year; and
• submit their actual mileage at the end of the year to trigger a reconciliation. Systems will be developed to deal with under and over payments.  

Motorists will have their mileage checked annually, either: 

• for cars that are required to have an annual MOT, during the MOT; or
• for cars that are under three years old and so not required to have an annual MOT, by an accredited provider on or around the car’s first and second anniversary. 

The mileage already paid for will remain with the vehicle when it is sold. 

Special cases 

The registered keeper of the vehicle will be legally responsible for paying eVED. However, the government acknowledges that fleets and leasing companies may require special arrangements and will engage with interested parties to determine how those arrangements could operate.