Reeves planning pay-per-mile tax for EVs in Budget

Chancellor Rachel Reeves is reportedly preparing to introduce a pay-per-mile tax on electric vehicles in her upcoming Budget, in a move aimed at replacing lost fuel-duty revenue.

According to The Telegraph, the Treasury is considering charging around 3p per mile for EV drivers, with the policy expected to take effect from 2028 following consultation. The plan would ensure electric-car owners contribute to road upkeep as fuel-tax receipts fall with the shift to zero-emission vehicles.

Reports suggest the new levy could add about £250 a year for the average electric-car user, compared with roughly £600 in fuel duty currently paid by petrol and diesel drivers.

The system would not rely on GPS tracking, instead using mileage estimates and adjustments.

Critics warn the charge could undermine efforts to encourage EV adoption, while supporters say it would make motoring taxes fairer.

Reeves is expected to outline the proposal in her 26 November Budget statement.