Industry experts have criticised the Government’s latest plans for the controversial pay-per-mile car tax system, which will launch for millions of drivers in 2028.
Labour has confirmed that it will roll out Electric Vehicle Excise Duty (eVED) from 2028 as it attempts to recoup fuel duty revenue lost as drivers move away from petrol and diesel cars.
A consultation on pay-per-mile plans was launched in November after being announced by Chancellor Rachel Reeves in the Autumn Budget to ensure all drivers pay for their share of using the road.
In its response to the consultation, which was published yesterday, the Government stated that the mileage rules for electric and plug-in hybrid car owners would start in April 2028.
Electric car owners will be charged 3p per mile, while owners of plug-in hybrids will pay 1.5p, with drivers expected to submit mileage rates to calculate how much they owe.
The consultation response confirmed that vehicles under three years old, which are not currently required to have an annual MOT, will not need additional mileage checks.
Drivers of vehicles under three years will provide an odometer reading and estimated mileage for the year ahead every time they renew their Vehicle Excise Duty.
Tanya Sinclair, CEO of Electric Vehicles UK, said the rule change was proof that the Government was listening to feedback “where it mattered”.
She said: “Dropping mandatory mileage checks for cars under three years removes a significant speed bump that would have been a burden on new drivers and big fleets.
“Where Government still needs to do better is in how it communicates its policies to drivers. We still have a mix of incentives, taxes, grants and policies which don’t clearly echo its vision of an all-electric future.”
This was acknowledged by Toby Poston, CEO of the British Vehicle Rental and Leasing Association (BVRLA), who said the Government had taken the “roughest edges” off its eVED plans.
Despite this, he warned that drivers and businesses could not have a smooth transition to EVs if they are making them more expensive to own.
“The mechanics of the tax may have improved, but the timing is still wrong,” Mr Poston added.
The Department for Transport’s response to the consultation outlined that the new eVED system will not support automatic refunds at launch.
This is down to the “significant and complex work required to amend the DVLA legacy vehicle systems”, although the Government said it would support refunds in further scenarios in the future.
Ben Nelmes, CEO of New AutoMotive, criticised the plans, saying they risk becoming an “albatross around the neck of the next Chancellor and Transport Secretary”.
He said: “It is staggering that the DVLA’s legacy computers are unable even to process a simple automatic refund when someone sells or scraps their car.
“That in itself should be a massive red flag for the incoming Government about the deliverability of this policy.
“With uncertainty over EV targets and a risky new tax on electric motoring, drivers, businesses and investors will question the UK’s commitment to the transition. New ministers should pause, take stock and get this right.”
As part of the next phase of the rollout, the Government will support DVLA systems, draft legislation and continue to engage with garages on the operation of mileage verification through the MOT network.
