New per mile road charge for EVs and plug in hybrids
A new per mile road charge will apply to low emission vehicles, 3p per mile for electric cars, 1.5p per mile for plug in hybrids
EV & plug-in hybrid mileage rates from April 2028
UK Government 3p & 1.5p per mile explained
EVs and plug in hybrids still tend to be cheaper to run, pound for pound, than equivalent petrol and diesel cars, especially if you charge at home on a good tariff. Electricity has VAT but no fuel duty, while petrol and diesel include fuel duty and VAT in every litre.
The UK Government, under Labour, is set to introduce a new road charge per mile from April 2028, at 3p per mile for electric cars and 1.5p per mile for plug in hybrids, with the rates rising each year in line with inflation. This page explains what is proposed, how it compares with petrol and diesel taxes, and what it could mean for everyday driving.
We will update this guide once the final Budget documents and GOV.UK guidance are published, and we will link to the official sources as soon as they are live.
What is changing from April 2028
Annual uprating with inflation
Rates are expected to increase each year with inflation
Around half the per mile impact of petrol fuel duty
The Government has indicated these figures are about half of the fuel duty rate paid by many petrol drivers on a per mile basis
How the charge could be collected and enforced
Collection and enforcement methods will be set out by the UK Government, details may include odometer checks, periodic declarations, or approved digital tools
How this compares with petrol and diesel taxes
It helps to separate what you pay today at the pump from the new per mile approach.
- Petrol and diesel, the pump price includes fuel duty paid to the UK Government, plus VAT, this tax is added to every litre, so it raises the cost of each mile you drive in a petrol or diesel car
- Electricity for EVs and for plug in hybrids, home charging usually has 5 percent VAT, most public charging has 20 percent VAT, there is no fuel duty on electricity, which is one reason many electric miles are cheaper than combustion miles
- From April 2028, EVs and plug in hybrids would also pay a per mile road charge, 3p per mile for EVs and 1.5p per mile for PHEVs, rising with inflation
In short, petrol and diesel drivers contribute through fuel duty on every litre, EV and plug in hybrid drivers are expected to contribute through a per mile road charge.
What do the 3p and 1.5p figures mean
- Electric cars, 3p per mile for all miles driven from April 2028, with annual uprating by inflation
- Plug in hybrids, 1.5p per mile for all miles driven from April 2028, with annual uprating by inflation
These are per vehicle type figures, not per driving mode. The Government will confirm which vehicles are in scope, any exemptions, and how the charge will be paid.
Examples to make it clear
- An electric car driving 8,500 miles in the 2028 to 2029 financial year would pay about £255 at 3p per mile
- A plug in hybrid driving 8,500 miles over the same period would pay about £127.50 at 1.5p per mile
- If an EV covers 12,000 miles, the charge would be 12,000 times 3p, which equals £360
- If a PHEV covers 12,000 miles, the charge would be 12,000 times 1.5p, which equals £180
Your total running cost per mile will still depend on your tariff, how often you charge at home or in public, your driving style, and your vehicle efficiency.
Why EVs and plug in hybrids can still be cheaper to run
- Electricity costs per mile can be lower than petrol or diesel for many drivers, especially with home charging on a suitable tariff
- There is no fuel duty on electricity, only VAT, which helps keep energy costs down compared with fuel duty on petrol and diesel
- Many EVs have lower servicing and maintenance costs, regenerative braking can reduce brake wear, and there are fewer moving parts than in a combustion engine
- Even with the new per mile charge, many drivers will still see lower day to day running costs compared with an equivalent petrol or diesel car
Who is affected
- Private drivers of EVs and plug in hybrids, the new per mile road charge applies to everyday use, not only business travel
- Business users and fleets, the new charge will apply to business and private miles, HMRC will explain how to handle any business mileage claims and accounting
- Charge point users, there is no change to VAT on electricity in this announcement, home charging usually remains at 5 percent VAT, most public charging remains at 20 percent VAT
What this could mean for the market
According to the OBR outlook, the new charge could reduce EV demand by increasing lifetime cost, the report suggests manufacturers may respond by adjusting prices or by changing the mix of vehicles they sell to meet the zero emission mandate. The OBR has noted that the overall revenue raised depends on how quickly EV adoption grows, and it has provided early estimates that will be refined over time.
Frequently asked questions
Here are the main questions drivers are asking about the proposed per mile road charge for EVs and plug in hybrids, we will update these answers as soon as the UK Government publishes the final policy on GOV.UK.
Is this a new tax for all EV and plug in hybrid drivers?
Does this replace fuel duty for petrol and diesel cars?
How will the charge be collected?
Do I pay for business miles as well as private miles?
Who pays if I drive a company car?
What happens if I sell or buy a used EV or plug in hybrid?
Are there any exemptions or discounts?
Will this make EVs more expensive to own?
Will the rates always be 3p and 1.5p?
How CarSupermarket.com can help…
If you are comparing an electric car, a plug in hybrid, or a petrol or diesel model, we can help you work out the total cost of ownership in simple terms. We will include the new per mile charge, your likely energy or fuel costs, servicing, tyres, insurance, and any available incentives. Our team keeps specifications and pricing up to date using verified manufacturer information, so you can choose with confidence.
You can browse our latest EVs and plug in hybrids, filter by real world range, charging speed, body style, and budget, and save favourites so it is easy to compare.
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