7th October 2026
For years, one of the attractions of buying an electric car has been the prospect of lower running costs. No petrol or diesel to buy, no fuel duty and, until recently, no vehicle tax.
That picture has now changed.
Electric cars are already paying Vehicle Excise Duty, commonly called road tax. And from April 2028 the Government plans to add a new mileage-based tax on top.
The question now is whether the Chancellor could decide that motorists should start paying it a year earlier.
There is no evidence at present that the Government is planning to do that. But with the next Budget approaching and the Treasury looking for revenue, it is worth understanding exactly what has already been announced.
EVs are no longer exempt from road tax
The first important change has already happened.
Since 1 April 2025, electric and zero-emission cars have been brought into the Vehicle Excise Duty system. That means an electric car is no longer automatically free of road tax.
For the 2026/27 tax year, an electric car registered on or after 1 April 2025 pays £10 for its first year and then the standard rate of £200 a year.
Electric cars registered between April 2017 and March 2025 pay the £200 standard rate.
Older electric cars registered between March 2001 and March 2017 currently pay £20 a year.
So the idea that electric cars are currently "untaxed" is already out of date.
Some expensive EVs pay even more
There is another charge that catches some electric cars.
From April 2026, the threshold for the VED expensive-car supplement for new electric cars was increased from £40,000 to £50,000.
For qualifying cars, the supplement is payable for five years from the second year of vehicle tax.
This means that buying a relatively expensive electric car can already result in a considerably larger annual tax bill than the basic £200 VED charge.
The Government increased the threshold partly because it recognised that electric cars have historically been more expensive to buy.
But the really significant change comes in 2028
The next stage is much more interesting.
From 1 April 2028, the Government plans to introduce Electric Vehicle Excise Duty, or eVED.
This will be a mileage-based charge.
The proposed rates are:
Battery electric cars: 3p per mile
Plug-in hybrid cars: 1.5p per mile
Hydrogen fuel-cell cars will also be subject to a 3p-per-mile rate.
And importantly, this is not replacing VED.
It is an additional charge.
An electric car driver could therefore be paying the normal annual vehicle tax and then paying eVED according to how many miles the car travels.
What could 3p a mile mean?
The calculation is quite simple.
A driver covering:
5,000 miles a year would pay about £150.
10,000 miles would mean about £300.
15,000 miles would mean about £450.
20,000 miles would mean about £600.
That would be on top of VED.
For a driver doing 10,000 miles a year, the mileage tax alone would therefore be equivalent to about £25 a month.
For someone doing 20,000 miles, it would be about £50 a month.
That is not necessarily a huge amount compared with the total cost of owning a car, but it changes the economics of electric motoring.
Why is the Government introducing it?
The argument is straightforward.
Petrol and diesel drivers pay fuel duty every time they buy fuel. Electric motorists don't.
As more cars switch to electric power, the amount of fuel duty collected by the Treasury will inevitably decline.
The Government therefore wants a replacement source of revenue which, like fuel duty, depends partly on how much a vehicle is driven.
The Government says eVED is intended to help replace the lost fuel-duty revenue from cars over the long term.
There is also a political argument behind the tax.
All cars use roads. An electric car doesn't escape congestion, road maintenance or potholes simply because it doesn't have an exhaust pipe.
The Government says eVED revenue will help fund road maintenance.
Indeed, the 2025 Budget said the Government intends to use the revenue generated by eVED to support increased spending on maintaining local roads.
The Treasury is talking about serious money
This isn't a minor tax designed simply to make electric motorists contribute a little more.
The Office for Budget Responsibility estimated that eVED could raise about £1.1 billion in 2028/29, rising to around £1.9 billion by 2030/31.
That makes the timing rather important.
If the Treasury could collect a substantial amount of this money one year earlier, it would obviously have a revenue value.
But that does not mean the Chancellor is planning to do it.
Could the Chancellor bring it forward to 2027?
Technically, the answer is yes.
The Government can change tax legislation.
But there is currently no published evidence that the planned start date has been moved from April 2028 to April 2027.
In fact, the Government's latest material continues to state that eVED will begin in April 2028.
HMRC published draft legislation for the tax in July 2026, and the legislation explicitly specifies the April 2028 start date.
As recently as September 2026, Treasury ministers were still describing eVED as beginning in April 2028.
So there is an important distinction between something the Chancellor could do and something we have evidence he is preparing to do.
At present, we have evidence for the first but not the second.
Why might the date nevertheless be worth watching?
The timing of eVED has become more interesting because the Government has already done much of the difficult policy work.
There has been a consultation.
There is draft legislation.
The tax rates have been announced.
The Treasury has calculated the expected revenue.
And the system for recording mileage is being developed.
The Government has even said it will investigate an optional telematics-based system using the connectivity built into many newer vehicles.
So this is no longer simply an idea on a Treasury whiteboard.
It is a tax which the Government is actively preparing to implement.
The question is whether the timetable could be changed.
There is another important point for EV owners
The Government is effectively introducing two different taxes on electric cars.
The first is ownership tax through VED.
The second will be usage tax through eVED.
That represents quite a change from the early years of the electric-car transition.
A motorist considering buying an EV therefore needs to look beyond the electricity cost of charging.
They need to consider the purchase price, insurance, depreciation, VED, charging costs and, eventually, the mileage tax.
For someone who drives relatively few miles, eVED may be fairly modest.
For a high-mileage driver, it becomes much more significant.
And what happens after 2028?
The proposed 3p-per-mile rate isn't necessarily going to remain frozen forever.
The Government has said the rates will be increased in line with inflation from 2029/30 onwards.
That means today's 3p-per-mile figure should not necessarily be regarded as the permanent cost of driving an electric car.
This is perhaps the bigger issue.
A driver buying an EV today could reasonably be thinking about keeping it for five, eight or even ten years.
The tax position over that period could look very different from today's.
Is this the beginning of pay-per-mile motoring?
The Government insists that eVED is specifically designed for electric and plug-in hybrid cars because of the decline in fuel-duty revenue.
It is not currently described as a general pay-per-mile tax for every vehicle.
But it does establish an important principle.
Instead of taxing motorists mainly through the fuel they put into their cars, the Treasury will increasingly be able to tax how far they drive.
As electric vehicles become a larger part of the vehicle fleet, that principle could become increasingly important.
For now, however, there is no announcement that petrol and diesel cars are being moved onto the same mileage system.
The Budget question
That leaves EV owners with a fairly simple question ahead of the Budget.
Is April 2028 really the date when the mileage tax begins, or could the Chancellor decide that the Treasury needs the money sooner?
At present, the evidence points to 2028.
The draft legislation says 2028. Treasury ministers are still saying 2028. The official consultation response says 2028.
There is therefore no justification for telling EV owners that a 2027 mileage charge is imminent.
But there is equally nothing that prevents a future Budget from changing the timetable.
And once a Government has established a tax which is expected to raise nearly £2 billion a year, the date on which it starts collecting it becomes a rather important Budget decision.
For electric-car owners, therefore, the tax story has already changed.
The days when buying an EV meant escaping motoring taxation are over.
The immediate question is not whether electric cars will be taxed.
They already are.
The question is how quickly the Treasury intends to make motorists pay for the miles they drive.