After years of tax advantages, the United Kingdom is considering a significant change: implementing a new tax per kilometer traveled on electric carsThe proposal, currently in the design phase, aims to offset the drop in fuel revenue without hindering electrification, although striking a balance will not be easy.
According to British media reports, the Treasury is considering a rate of 3 pence per mile (approx. €0,021/km) which would begin in 2028. The measure would not replace other taxes: This would add to the vehicle registration tax (VED), which is around 195 pounds per year.which would change the bill for many drivers.
How would the per-kilometer charge work?
The proposed scheme involves a pay-per-use model with a fixed rate: £0,03 per mileIn practical terms, a driver who travels about Driving 8.000 miles a year would cost approximately an additional £240.while whoever does For 15.000 km I would pay around €315always taking as a reference the values indicated by the Executive and automobile clubs. To manage the control, the Government is studying which users declare an estimated annual mileage and that, afterwards, the data adjustment with odometer readings during the technical inspection (equivalent to the MOT).
This model would reduce the risk of fraud, although It raises questions about privacy. and administrative burden. On the budgetary front, the Treasury estimates that the system could raise around 1.800 billion pounds annually at the beginning of the next decade, a significant figure but still far from the historical revenues from the fuel tax.
What changes for drivers…
If implemented, the per-kilometer tax in the United Kingdom would apply in addition to the VEDThe final bill will therefore depend on actual car usage. The British government has already hinted that hybrids could also be included in the scheme, although these already contribute through fuel taxes when using the combustion engine.
Meanwhile, authorities emphasize that they remain incentives for the purchase of electric vehicles in order to sustain demand during the transition. Even so, user perception will be key. If the cost of use rises, the economic appeal of EVs may erode.especially for those who depend on cars in areas with fewer transport alternatives.
Industry and sector reactions…
The British employers' federation SMMT has described the moment as "inadequate" due to its potential deterrent effect in a market that is still consolidating its electricity growth. Manufacturers and distribution networks fear a sales slowdown just when they are supposed to meet the objectives of the ZEV mandate.
The UK's Automobile Association (AA) and other stakeholders are warning of a possible unequal and negative impact on professional drivers and rural areasTherefore, they demand a clear, understandable design with safeguards to prevent disproportionate burdens for those who travel the most kilometers out of necessity.
Europe is looking to the British model…
The debate transcends the United Kingdom and brings the issue back to the forefront in Europe. payment for use of road infrastructure as a tool for fiscal sustainability. Neighboring countries are exploring mileage control formulas based on odometer readings or telematics systems, with a focus on data protection and simplicity.
At the European level, cases where a similar scheme is already being discussed are also being closely monitored, such as Switzerlandwhich is studying ways to balance revenues and maintain technological neutrality. For Spain and other countries, What happens in the United Kingdom can serve as a laboratory. for future vehicle taxation frameworks.
Calendar and next steps…
The Minister of Finance, Rachel Reeves, plans to detail the proposal in the budget presentation of November 26th and open a public consultation before its implementation. The plan targets 2028 as the date of entry into force and takes as its hypothesis the park about 6 million electric vehicles in circulation then.
If it is ultimately approved, the United Kingdom will inaugurate in Europe a explicit pay-per-kilometer model For electric vehicles, with a simple tariff, usage verification mechanisms, and a clear objective: sustain road funding without turning its back on zero-emission mobility. The actual scope will depend on the final design, the level of control, and its integration with other existing taxes and incentives.
Source - Auto Express
Images | AM
