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- How the UK’s new mileage-based EV tax system works
- Climate goals, tax reform and who carries the burden
- Who is most affected and what can be done next
- Practical options to balance climate and fairness
- Why are rural motorists expected to pay more under the new EV tax?
- Will electric vehicles still be cheaper to run than petrol cars?
- Could the mileage-based tax slow down electric vehicle adoption?
- Are any support measures planned alongside the new EV tax?
- How can drivers influence the final design of the EV tax system?
Imagine driving the same electric car, the same number of years, but paying almost four times more road tax just because you live in Cornwall instead of Camden. That is what the UK’s new mileage-based EV tax system could mean for many rural motorists.
Behind the headline numbers sits a broader question about who pays for cleaner transport, and whether the transition to electric vehicles ends up punishing the very communities that rely on cars the most.
How the UK’s new mileage-based EV tax system works
The UK government plans to introduce a 3p-per-mile road tax for pure electric cars from 2028, with plug-in hybrids paying 1.5p per mile. The reform aims to plug a growing gap in fuel duty revenues, which have fallen from about £27.5bn in 2019–20 to a projected £24bn this year as drivers shift away from petrol and diesel.
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According to the Office for Budget Responsibility, the new EV tax system is expected to generate around £1.1bn a year. Officials presenting the policy argue it mirrors fuel duty: people who drive more will pay more, regardless of technology. Today, an average petrol driver pays roughly £480 a year in fuel duty, while an EV driver pays none, a gap ministers say is increasingly hard to justify.
Why rural motorists face the highest costs
New analysis using the 2024 National Travel Survey shows the burden of this mileage-based tax will fall unevenly across the country. Drivers in the south-west of England, who typically cover longer distances and have limited public transport, would pay about £110.25 a year. In contrast, London EV owners would pay just £33.09 on average.
The same pattern repeats across regions. The East Midlands averages £105.09, while the north-east and north-west sit near £82–£84. Zoom in further and the split is starker: people in villages and small rural towns near cities are projected to pay around £156.51 per year, compared with £76.02 for residents of large cities. That gap illustrates how a “flat” rate quickly becomes a geographical divide.
This rural–urban contrast echoes concerns raised by researchers and commentators. Coverage such as the breakdown of south-west drivers paying four times more than Londoners underlines how heavily car-dependent communities could be hit by the new structure.
Climate goals, tax reform and who carries the burden
The government frames the change as a fairness issue and a necessary tax reform. From a climate perspective, road pricing can make sense: charging per mile can discourage unnecessary trips, reward efficient routing and reflect the true transportation costs of congestion and road wear. The Committee on Climate Change has long noted that as vehicles decarbonise, traditional fuel taxes lose their bite.
Yet, the same data that justifies a distance-based road tax also exposes a social fault line. Rural households drive further for work, school, healthcare and everyday shopping. They often lack reliable bus or rail alternatives. A uniform 3p rate does not distinguish between a discretionary city-centre journey and a necessary 30-mile round trip to the nearest hospital.
Impact on EV adoption and the wider transition
Electric car registrations grew by almost a quarter in 2025, reaching a record 473,000 sales, roughly 23.4% of the UK market. That still fell short of the 28% target under the national zero emission vehicle mandate, a shortfall that already worries policymakers striving to keep pace with climate commitments.
The OBR estimates the new charge could cut EV sales by about 440,000 over five years. Thom Groot, chief executive of The Electric Car Scheme, warns that the timing is delicate: the market is moving from early adopters to mainstream buyers who are more price-sensitive and often more sceptical about new technology. Any fresh cost can feel like another reason to delay switching.
At the same time, Groot stresses that even with the 3p-per-mile charge, EVs remain cheaper to run than petrol cars. Lower electricity costs, reduced maintenance and purchase incentives still tip the equation, especially when combined with the expanded £1.3bn electric car grant package, which now offers up to £3,750 off a new EV.
Who is most affected and what can be done next
Take a fictional driver, Sarah, who lives in a Devon village and commutes 12,000 miles a year in her electric hatchback. Under the new EV tax system, she would pay about £360 annually in mileage charges. Her cousin Amir in east London, driving the same model but covering 3,500 miles, would pay just over £100. Same car, same technology, very different bills because of postcode and lifestyle.
Analyses from outlets such as The Conversation’s exploration of pay-per-mile fairness and pieces on how changing road charges affect vans and tradespeople, like the overview of why UK white vans face a tough road ahead, show this debate is not limited to private cars. It reaches deep into small businesses, delivery drivers and care workers.
Practical options to balance climate and fairness
Several adjustments could keep climate ambition high while softening the blow for those who cannot easily cut mileage. Policymakers and campaigners are already floating ideas during the current consultation period, which runs until mid-March.
- Tiered rural discounts: A lower per-mile rate for designated rural postcodes could recognise limited public transport and longer average trips.
- Free or reduced miles for essential journeys: Baseline annual mileage for work, medical visits or caregiving could be taxed at a lower band.
- Integration with congestion charging: Urban drivers might swap some existing city fees for a unified, transparent distance-based system, avoiding “double taxation”.
- Stronger support for public and shared transport: Investment in rural buses, car clubs and demand-responsive shuttles can help residents cut paid miles without losing mobility.
- Targeted grants for low-income drivers: Extra purchase support or operating credits for households on tight budgets would help keep the switch to EVs attractive.
Whatever the precise mix, the key test will be whether the system encourages cleaner travel choices while staying fair to those with few alternatives. A smartly designed road tax can support climate goals without leaving rural motorists carrying the highest costs alone.
Why are rural motorists expected to pay more under the new EV tax?
Rural households typically drive longer distances for work, school and basic services, and often lack reliable public transport. Because the new UK EV tax is based purely on mileage at 3p per mile, those extra kilometres quickly add up. Analysis of travel data suggests drivers in the south-west of England could pay almost four times more than London EV owners, even when driving similar cars.
Will electric vehicles still be cheaper to run than petrol cars?
Yes. Even with a 3p-per-mile charge, most EV drivers are expected to spend less overall on energy and maintenance than petrol drivers do on fuel duty and fuel costs. An average petrol driver currently pays around £480 a year in fuel duty alone, while EVs start from zero today and will still pay roughly half that level once the new road tax is fully in place.
Could the mileage-based tax slow down electric vehicle adoption?
The Office for Budget Responsibility estimates the policy could reduce EV sales by around 440,000 over five years. Some potential buyers, particularly outside big cities, may see the new charge as a reason to delay switching. However, purchase grants of up to £3,750, lower running costs and tighter emissions rules are likely to keep EV uptake growing overall, especially if the tax is fine-tuned to address fairness concerns.
Are any support measures planned alongside the new EV tax?
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Yes. The mileage-based charge was announced together with a £1.3bn expansion of the electric car grant scheme, offering sizeable discounts on new EVs. During the current consultation, experts are also calling for rural discounts, protection for essential journeys and better funding for public transport, so that drivers who cannot cut their mileage are not unfairly penalised.
How can drivers influence the final design of the EV tax system?
Drivers can respond to the official consultation on the 3p-per-mile charge, share evidence about their annual mileage and highlight how limited alternatives affect their choices. Motoring organisations, rural councils and environmental groups are gathering testimonies from members to push for a fairer design, including tiered rates and safeguards for low-income households. Individual stories and data from everyday journeys can shape a more balanced outcome.
