UK Introduces New One Fifty GBP Pay-Per-Mile Tax for Electric Vehicle Owners: What It Means for Drivers and Tourists

Published on December 25, 2025

The UK government is preparing to implement a new pay-per-mile tax in 2028, targeting owners of electric vehicles (EVs). This new regulation will require EV owners to pay a fee based on the distance they travel annually. Those driving shorter distances may be surprised by how much they could owe, with the rate set at 3p per mile.

For instance, drivers covering an average of 8,500 miles a year will face a charge of £255, while those driving just 5,000 miles annually will have to pay £150. The tax is designed to help the government compensate for the loss of fuel duty as the UK transitions towards more eco-friendly vehicles. However, the new tax has already sparked concerns, particularly among commuters and residents in rural areas who depend heavily on their cars.

Details of the New Pay-Per-Mile Tax: What You Need to Know

The new tax structure will introduce a charge of 3p per mile for electric vehicle owners, which will be applied to the total miles driven in a year. For example, a driver who logs 8,500 miles a year will be faced with a tax bill of £255.

The system will affect both frequent and infrequent drivers. Even those who only travel a modest distance, such as 5,000 miles annually, will still be liable for the £150 tax. The implementation of the tax is planned for the spring of 2028, giving both motorists and authorities ample time to adjust to the changes.

For daily commuters who drive significant distances for work, such as those living in rural areas or remote regions, the new charge could lead to much higher costs. This is especially true for individuals with long commutes to urban areas, where driving is often the only feasible transportation option.

Impact on Commuters and Rural Residents

The primary concern surrounding the new pay-per-mile tax is the potential financial burden on commuters who rely heavily on their electric vehicles for daily travel. This is particularly concerning for those in rural areas, where public transport options may be limited or unavailable. As these individuals often travel long distances to reach their workplaces, they could face steep charges under the new system.

Critics argue that the tax unfairly targets these individuals and will lead to increased costs for essential travel. They believe the tax could disproportionately affect lower-income groups who live in areas with fewer alternatives to car use.

In contrast, those who live in urban centres and rely on public transport for daily commutes may find the impact of the new tax less significant, as they typically cover shorter distances with their vehicles.

Impact on Business Travel and the Tourism Industry

The introduction of a pay-per-mile tax for electric vehicles will also have implications for business travel. Companies with a fleet of electric vehicles will need to consider how the new tax will affect their operating costs. Particularly for businesses that rely on transport for delivery or client meetings, the additional cost could impact profitability, especially for those in rural areas or with large geographic regions to cover.

For tourists, the new tax could potentially affect travel plans, especially if they are planning to rent electric vehicles during their stay in the UK. The cost of renting an electric vehicle could rise as rental companies may pass on the new tax charge to customers. Additionally, long-distance tourists who rely on EVs for exploring remote locations may find themselves facing unexpected travel costs, affecting their overall budget.

Key Points to Understand:

• The new tax will be introduced in spring 2028, applying a charge of 3p per mile to electric vehicle owners.
• Drivers who travel 5,000 miles annually will face a £150 tax, while those driving 8,500 miles will pay £255.
• The new tax could impact commuters in rural areas, long-distance travellers, and business owners who rely on electric vehicles.
• Critics argue the tax unfairly targets people in remote areas who have limited transportation options.
• The pay-per-mile system is designed to replace the lost revenue from fuel duty as more people transition to electric vehicles.

How This New Tax Could Affect Tourists and Visitors

Tourists planning to visit the UK and rent an electric vehicle may find that the cost of their rentals increases due to the implementation of the new tax. While this tax is not yet in effect, it’s wise for travelers to anticipate changes and plan their budgets accordingly. Here are some key things tourists should keep in mind:

• Higher Rental Fees: Expect a potential increase in the cost of renting an electric vehicle, especially for long-distance trips, as rental companies may pass on the tax.
• Plan Travel Routes Wisely: If you plan to drive long distances, especially in rural areas, be prepared for the additional costs.
• Factor in Extra Costs for Business Travel: Business travellers who rely on EVs for work-related trips will need to account for this new charge in their travel budgets.

Step-by-Step Guidelines for Drivers and Tourists:

1. Stay Updated on Tax Changes: Keep an eye on official government websites for updates on the new pay-per-mile tax as the 2028 implementation date approaches. Make sure you understand how this will affect your travel expenses.
2. Budget for Travel Costs: If you’re planning a trip to the UK, budget for potential increases in rental car costs, especially if you plan to rent an electric vehicle for long-distance travel.
3. Use Public Transport Where Possible: In urban areas, consider using public transportation, as it may be more cost-effective and will help you avoid the new mileage charges.
4. Explore Alternative Transportation Options: If you live in a rural area or depend heavily on your electric vehicle, investigate other transportation options or adjust your daily routines to limit your mileage.
5. Consult Rental Companies for Costs: When renting a car, ask your rental company about how the new tax might affect your rental rates and what additional fees may apply.

Conclusion: Navigating the New Pay-Per-Mile Tax in the UK

The upcoming introduction of the pay-per-mile tax for electric vehicles in the UK is set to change the landscape of driving and travel in the country. With the new system, EV owners, commuters, and even tourists will need to prepare for the added costs, particularly those who rely heavily on their vehicles for daily use or long-distance travel. While the tax aims to replace lost fuel duty revenue and encourage more sustainable transport options, it has sparked concerns about its fairness, especially for rural residents and business travellers.

As the 2028 implementation date approaches, both UK residents and international tourists will need to stay informed about the potential impact of this new tax. By planning ahead, exploring alternative transport options, and factoring in the additional costs, travelers can better manage their expenses while continuing to enjoy the UK’s rich culture and vibrant tourism sector.

Disclaimer: The Attached Image in This Article is AI Generated