Electric vehicle owners to face pay-per-mile tax

A new tax for electric and hybrid vehicles have been confirmed in a leaked report outlining the UK’s economic and fiscal outlook ahead of the Budget.

The Office for Budget Responsibility’s (OBR) document has stated the charge would mean electric car drivers will pay a road charge of 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile from April 2028, with the rates going up each year with inflation.

The government hopes to raise £1.4bn through the new tax, which is about “half the fuel duty rate paid by drivers of petrol cars”, the report says.

In a statement, the OBR apologised for the leak and said it was investigating the error.

Under the measures, an electric car driver clocking up 8,500 miles in the 2028-29 financial year is expected to pay about £255 – about half the cost per mile that petrol and diesel drivers pay in fuel tax.

Edmund King, president of the AA, said: “The Budget has put drivers at a fork in the road with the chancellor announcing major tax proposals for EV owners.

“Drivers fully understand that the government needs to get the balance right between raising cash for roads investment, whilst ensuring it doesn’t slow down the transition to electric cars in order to meet environmental targets.”