Pay per mile road tax is no longer a theoretical idea for the UK. The government has confirmed Electric Vehicle Excise Duty (eVED), a distance-based charge that will apply to every battery electric and plug-in hybrid car from 1 April 2028. The Department for Transport consultation closed on 18 March 2026, and the framework is now set: 3p per mile for BEVs and 1.5p per mile for PHEVs, recorded through odometer readings rather than GPS trackers. Here is everything drivers and businesses need to know.
What Is eVED and Why Is It Happening?
Electric Vehicle Excise Duty is a new per-mile tax designed to replace the fuel duty revenue that the Treasury loses as more drivers switch to electric. Petrol and diesel drivers currently pay roughly 6p per mile in fuel duty every time they fill up. EV drivers pay nothing at the pump, and as EV adoption accelerates, that gap becomes a serious fiscal problem.
The Office for Budget Responsibility forecasts fuel duty receipts will fall to around half their current level — roughly £12 billion — by the early 2030s. eVED is the government’s answer: a mileage-based charge that ensures EV drivers contribute to road funding while still paying less than drivers of internal combustion vehicles.
HM Treasury expects eVED to raise £1.1 billion in the 2028-29 tax year, rising to £1.9 billion by 2030-31. It is not a replacement for standard VED — both taxes will apply simultaneously from April 2028 onwards.
Confirmed eVED Rates and Annual Costs
The per-mile rates confirmed in the consultation are straightforward:
- Battery electric vehicles (BEVs): 3p per mile
- Plug-in hybrid vehicles (PHEVs): 1.5p per mile
These rates represent roughly half the 6p-per-mile fuel duty equivalent that petrol and diesel drivers pay, ensuring EVs remain cheaper to run on a per-mile basis.
To illustrate what this means in practice:
| Annual Mileage | BEV eVED Cost | PHEV eVED Cost |
|---|---|---|
| 5,000 miles | £150 | £75 |
| 8,500 miles | £255 | £128 |
| 10,000 miles | £300 | £150 |
| 15,000 miles | £450 | £225 |
| 20,000 miles | £600 | £300 |
These figures are in addition to standard VED, which currently sits at £190 per year for most vehicles from year two onwards (plus the expensive car supplement for vehicles with a list price above £50,000). From 2029-30, eVED rates will be uprated annually in line with CPI inflation.
How Will eVED Work? Odometers, Not GPS
A major concern when pay-per-mile road tax was first discussed was privacy. Many drivers feared mandatory GPS trackers recording every journey. The government has explicitly ruled this out. eVED uses odometer readings — the same mileage figure already displayed on your dashboard.
Here is how the process works:
- Estimate your mileage — when you renew your VED (road tax), you provide an estimated annual mileage figure.
- Pay alongside VED — your estimated eVED charge is collected monthly or as a lump sum through the existing DVLA vehicle tax system. No new accounts or platforms are required.
- Mileage is verified — your actual odometer reading is recorded at your annual MOT test (for vehicles over three years old). For newer cars that are not yet MOT-age, readings will be taken at the first and second registration anniversaries.
- Reconciliation — if you drove fewer miles than estimated, you receive a credit. If you drove more, a balancing payment is due.
This odometer-based approach is simpler and less intrusive than GPS tracking, though it does mean there is no variation by road type or time of day — every mile costs the same.
What eVED Means for Business Drivers
For anyone who drives for work — whether employed, self-employed, or running a limited company — eVED introduces a new cost layer that makes accurate mileage records more important than ever.
Separating business and personal miles eVED is charged on total mileage regardless of purpose. If you drive 12,000 miles per year with 8,000 for business, your eVED bill covers all 12,000 miles. However, the business portion may be reclaimable as a legitimate expense. HMRC has not yet confirmed the exact mechanism, but clear records splitting business and personal journeys will be essential.
Impact on mileage allowance claims If you claim the HMRC mileage rate of 45p per mile (first 10,000 miles) or use the advisory fuel rates for company cars, eVED adds to the real cost of each mile driven. The Treasury may adjust approved mileage rates to reflect this new charge, but until that happens, the gap between the flat 45p rate and actual running costs will shift.
Fleet operators and company cars Businesses running electric company car fleets will see running costs increase predictably with mileage. Combined with the low 2% BIK rate for zero-emission vehicles, EVs remain tax-efficient company cars — but the total cost of ownership calculation now includes eVED alongside electricity, insurance, and VED.
Making Tax Digital compliance From April 2026, Making Tax Digital requires self-employed individuals and landlords with qualifying income to keep digital records. eVED adds another reason to maintain detailed, digital mileage logs that can support both tax claims and road tax reconciliation.
How Does eVED Compare to Current Motoring Taxes?
To put eVED in context, here is what a typical EV driver currently pays versus what they will pay from April 2028:
Before eVED (2026/27)
- Standard VED: £190/year
- Fuel duty: £0 (electric)
- Total annual road tax: £190
After eVED (2028/29, 10,000 miles)
- Standard VED: ~£190/year (subject to uprating)
- eVED: £300/year (BEV) or £150/year (PHEV)
- Total annual road tax: ~£490 (BEV) or ~£340 (PHEV)
By comparison, a petrol car driver covering 10,000 miles at 40 mpg pays roughly £600 in fuel duty alone, plus £190 VED — a total of around £790. EVs will still be significantly cheaper on road taxes even after eVED is introduced.
Why Mileage Tracking Is Now Essential for Every EV Driver
eVED makes your odometer reading a tax-relevant figure. Every mile you drive directly affects what you owe, which means accurate mileage tracking is no longer just useful for HMRC expense claims — it is fundamental to managing your motoring costs.
Here is why drivers are turning to Tripbook to stay on top of this:
- Automatic journey logging — Tripbook records every trip with GPS, giving you a precise, timestamped record of business and personal miles that matches your odometer.
- Business vs personal separation — with eVED charged on total mileage, knowing exactly which miles are for business is critical for reclaiming costs. Tripbook lets you categorise each journey with a single swipe.
- HMRC-ready reports — whether you need a mileage log for business mileage record-keeping or a Self Assessment claim, Tripbook generates compliant reports that stand up to inspection.
- eVED cost visibility — by tracking every mile digitally, you can estimate your annual eVED liability and avoid surprises at reconciliation time.
Whether you drive an electric car through a limited company or use your own EV for work, the combination of eVED, VED, and HMRC mileage rules means a reliable tracking system is essential rather than optional.
Key dates to remember:
- 18 March 2026 — DfT consultation on eVED closed
- April 2026 — Making Tax Digital goes live for qualifying self-employed individuals
- 1 April 2028 — eVED takes effect for all BEVs and PHEVs
- 2029-30 — first CPI uprating of eVED rates
Even though eVED does not start for another two years, building a consistent mileage log now means you will have reliable data from day one. If HMRC introduces mechanisms to reclaim business-related eVED, drivers with accurate records will be in the strongest position to benefit.
Download Tripbook from the App Store and start logging every mile before eVED arrives.
