What was actually confirmed
eVED was first announced at the 2025 Budget, and the government ran a consultation on how it would work from November 2025 to March 2026. On 13 July 2026 it published its response, locking in the core design. In short: from 1 April 2028, every UK-registered electric car and plug-in hybrid will pay a per-mile charge on top of the tax it already pays. Pure electric cars pay 3p a mile; plug-in hybrids pay 1.5p. The rates are pitched at roughly half the fuel duty a comparable petrol driver hands over at the pump.
Crucially, eVED sits alongside standard Vehicle Excise Duty (the annual "road tax") rather than replacing it — so from 2028 an electric car owner pays both. The reason the Treasury is doing this is simple accounting: every time a driver swaps petrol or diesel for electric, the fuel duty they used to pay disappears. With the Office for Budget Responsibility forecasting fuel duty receipts to keep falling as the country electrifies, eVED is designed to start plugging that gap. It's expected to raise around £1.1–1.2 billion a year to begin with, rising toward £1.9 billion by 2030.
Who is — and isn't — in scope: eVED applies to battery-electric and plug-in hybrid cars. Electric vans are exempt, and vans, buses, coaches and HGVs are all out of scope at launch because their switch to electric is further behind. Petrol and diesel drivers are unaffected — you carry on paying fuel duty at the pump exactly as now.
How you'll actually pay it
This was the part that worried people most, and it's where the consultation made the biggest changes. There is no black box, no tracker and no per-journey billing. Instead, when you renew your vehicle tax you'll give an estimate of your annual mileage and pay eVED up front based on that. Your car's MOT readings are then used to check the figure is roughly right. If a car already has an MOT, the government says there'll typically be no extra step involved.
The key practical points:
- Estimate, then reconcile: you pay on estimated miles and settle up against actual mileage — you can top up during the year if you're driving more than expected.
- New cars get a break: cars under three years old (four in Northern Ireland, until their first MOT) won't need annual mileage checks.
- Fleets can bulk-pay: leasing and fleet operators — who supply most company and salary-sacrifice cars — get simplified reporting after heavy criticism of the original plan.
- Refunds exist: if your circumstances change, refunds over £100 can be self-certified, with more refund scenarios promised by the end of 2026.
Winding back the odometer becomes a crime: Because the charge is mileage-based, the response makes odometer tampering a new criminal offence, and the DVLA gains the power to demand an extra check if your declared mileage looks off. One quirk worth knowing: miles you drive abroad still count, because the government decided tracking where you'd been would intrude on privacy more than it was worth.
So is an electric car still cheaper to run?
For most drivers, yes — and by a wide margin. At the government's headline rate, 10,000 miles a year in an electric car works out at about £300 in eVED (roughly £25 a month). Drive the same distance in a petrol car and you're paying somewhere around £600 a year in fuel duty alone — before you even count the actual cost of the petrol on top. eVED narrows the running-cost gap between electric and combustion cars; it doesn't close it.
That said, the picture isn't universally rosy. Because eVED is charged per mile regardless of how efficient your car is, high-mileage drivers feel it most. And the government's own forecaster, the OBR, expects the tax to slightly dampen electric car take-up. The fleet and leasing sector, which had warned the original design could cost it hundreds of millions a year in admin, welcomed the simplifications but still argues the timing is wrong while the EV market is fragile. As with any tax, whether it's "fair" depends a lot on where you're sitting.
The road to pay-per-mile:
- Nov 2025: eVED announced at the Autumn Budget.
- Nov 2025 – Mar 2026: consultation runs; over 5,000 responses.
- 13 July 2026: government confirms the design.
- 1 April 2028: eVED begins — 3p a mile (EVs), 1.5p (plug-in hybrids).
- From 2029: rates rise each year in line with inflation (CPI).
Why this matters if you drive petrol or diesel
You might reasonably ask why a petrol-and-diesel site is covering an electric car tax. The answer is that eVED is really a story about fuel duty — the single biggest tax you already pay every time you fill up. The government has now formally accepted that fuel duty revenue is going to shrink as drivers electrify, and has built its first mechanism to replace it by the mile. Once mileage-based charging exists for some cars, it becomes far easier to extend later. Nothing has been announced for petrol and diesel, but the direction of travel is now on the record.
For now, the tax you can actually influence is the one at the pump. Fuel duty is frozen at 52.95p a litre with the 5p cut running to the end of 2026 — we break the numbers down in how much of your fuel bill is tax and in our look at the duty cliff-edge ahead. And if eVED has you weighing up your next car, our explainer on the 2030 petrol and diesel ban review is a useful companion read.