UK plans EV excise duty

Britain plans to start charging a new mileage-based road tax on electric cars and plug-in hybrids from April 1, 2028. (commonslibrary.parliament.uk) The proposed levy is called electric vehicle excise duty, or eVED, and the House of Commons Library says it would sit alongside the existing vehicle excise duty system. The government opened a consultation after Budget 2025. (commonslibrary.parliament.uk) (gov.uk) Electric vehicles are already moving into the regular vehicle excise duty regime. Since April 1, 2025, new and existing zero-emission cars, vans and motorcycles have begun paying vehicle excise duty under rules first announced at Autumn Statement 2022. (gov.uk) (commonslibrary.parliament.uk) For electric cars first registered on or after April 1, 2025, the first-year rate is the lowest band for cars emitting 1 to 50 grams of carbon dioxide per kilometer, and later years move to the standard annual rate. Expensive electric cars can also face the extra supplement, with the zero-emission threshold raised to more than £50,000 from April 1, 2026. (gov.uk 1) (gov.uk 2) The new piece is that eVED would charge by distance driven, not just by owning the vehicle. The Commons Library says the policy is aimed at replacing part of the fuel duty revenue that falls as more drivers stop buying petrol and diesel. (commonslibrary.parliament.uk) The Treasury’s consultation says fuel duty receipts could drop to about £12 billion a year in the 2030s, roughly half today’s level. It says the government wants a system that keeps motoring tax revenue flowing while the shift to electric vehicles continues. (gov.uk) The consultation also says ministers gave carmakers extra flexibility on the Zero Emission Vehicle Mandate in April 2025, a rule that sets annual sales targets for cleaner cars. The government says eVED is meant to raise revenue without reversing support for the electric transition. (gov.uk) (commonslibrary.parliament.uk) Vehicle excise duty has long been an annual tax for using or keeping a vehicle on public roads, with rates linked to registration date and emissions rules. The main law behind it is the Vehicle Excise and Registration Act 1994. (commonslibrary.parliament.uk) What comes next is legislation. The Commons Library briefing says April 2028 is the planned start date, but the tax still needs the government to turn the consultation into law and set the final design. (commonslibrary.parliament.uk)