Discover Electric Vehicle Taxes and the Latest Ban Date for New Petrol and Diesel Cars

As the demand for electric vehicles (EVs) continues to grow, the government is considering new taxation measures to balance the playing field with traditional petrol and diesel cars. Ahead of the upcoming Budget, discussions are underway regarding the introduction of a “pay-per-mile” tax for EV drivers starting from 2028.

Electric Vehicle Taxation Overview

Currently, drivers of petrol and diesel vehicles pay fuel duty, but no equivalent charge exists for electric vehicles. A government spokesperson highlighted the necessity for a more equitable taxation system. Reports suggest that the proposed tax could be set at 3p per mile, potentially adding around £12 to a long-distance journey, such as from London to Edinburgh.

Implementation Challenges

The enforcement of this pay-per-mile tax may pose complications. Initial plans indicate that drivers would estimate their own mileage for tax calculations. The Automobile Association (AA) has urged caution, warning that imposing such taxes could hinder the transition to electric vehicles.

Ford has also expressed concerns, noting that new EV taxes might discourage consumers from making the switch, particularly as the momentum for electric vehicle adoption appears to be slowing.

Existing EV Charges

Changes to vehicle taxation for electric cars have already begun. From April 1, 2025, Vehicle Excise Duty will apply to electric vehicles for the first time. New EVs will incur a charge of £10 in the first year, escalating to a standard rate of £195 in subsequent years.

• Vehicles registered between April 2017 and March 2025 will automatically pay £195 from the start.
• Electric cars costing over £40,000 will face an additional “luxury car tax” of £425 annually for five years after the initial tax payment.

Future Charges in Major Cities

In London, a significant change is set to occur as electric vehicle drivers will be required to pay the congestion charge beginning in 2026. This shift reflects a broader intent to integrate EVs into existing traffic management frameworks while addressing tax equity among different vehicle types.

As discussions progress, it remains to be seen how these taxation strategies will shape the future of electric vehicle adoption in the UK.