At the Autumn Budget 2025, the government announced that eVED will be introduced from April 2028. Further details were provided in a consultation document, with views sought on the design and implementation of the system. ICAEW explained how eVED is expected to work in an earlier article.  

ICAEW’s view 

In its response to the consultation (ICAEW REPRESENTATION 24/26), ICAEW has acknowledged that eVED is a logical mechanism to ensure long-term funding for road infrastructure as the UK transitions to zero-emission vehicles. However, ICAEW has warned that the system is too complex and may undermine the government's strategic and environmental objectives.

Read more in ICAEW’s press release. 

Recommendations 

ICAEW recommends that the government: 

• Builds the system around an automated “set and forget” model to minimise user error and administrative friction. This should include auto-populated estimates based on historical MOT data and guardrails to prevent motorists from intentionally suppressing their mileage estimates year-on-year.
• Develops frictionless mechanisms for mid-year adjustments, straightforward cash refunds for overpayments, as well as automatic final mileage reconciliation and refunds for life events like theft or bereavement.
• Allows motorists who drive significant international miles to submit standard evidence (eg, ferry bookings) to claim a rebate on those miles.
• Introduces safeguards (eg, updates to the V5C transfer process) to ensure that eVED liability is transferred on the sale of a second-hand vehicle in a fair and robust manner. 
• Permits recognised leasing companies to defer the final eVED reconciliation and settlement until the end of a lease agreement.
• Clarifies whether an employer paying the total eVED liability centrally will trigger a benefit in kind charge on the employee's private mileage.
• Ensures that the penalty regime is proportionate and includes a statutory reasonable excuse framework.
• Implements a penalty-free or light-touch “soft landing” period of at least 12 months.
• Publishes a clear timeline for when eVED will be extended to commercial vehicles to alleviate investment uncertainty.
• Carefully monitors the interaction between eVED and fuel duty to ensure that the tax differential between internal combustion engine vehicles and electric vehicles (EVs) is maintained. If fuel duty is frozen, as has been the case in recent years, while eVED increases with inflation, the fiscal incentive to transition to EVs will be rapidly eroded.