Overview
- Chancellor Rachel Reeves is expected to announce a 3p-per-mile levy on electric vehicles in the November Budget, with a lower rate for hybrids, according to Treasury briefings reported by multiple outlets.
- The tariff would also apply to miles driven overseas, prompting warnings from the AA and others that UK motorists could be effectively taxed twice when using foreign toll roads.
- Under the reported design, drivers would estimate annual mileage and prepay alongside vehicle excise duty, with unused allowances carried over and top-ups required if estimates are exceeded.
- Treasury sources say the measure is intended to offset falling fuel duty receipts, with estimates suggesting it could raise about £1.8 billion by 2031, and officials say further support for EV owners will be considered.
- Separate reports say Reeves is weighing the removal of the 5p-per-litre fuel duty relief worth an estimated £2–3 billion, and some coverage suggests the new mileage charge could start from 2028.