This month’s Budget could include an announcement of plans for a new tax on EVs, it has been reported.
The Telegraph initially reported the story, saying the Budget would include a new pay-per-mile charge for EVs.
It said this would be levied at 3p-per-mile, and would begin in 2028 following a consultation.
The Telegraph said the new tax would be aligned to VED, and based on annual mileage estimates supplied by drivers. It added that the tax would also apply to hybrids, at a lower rate.
The BBC has reported that it understood a new EV levy had been discussed by the government, and quoted a spokesperson saying it wanted a “fairer system for all drivers”, with EVs having no equivalent of the fuel duty applied to petrol and diesel.
Reacting to the reports, Octopus Electric Vehicles head of policy James Court said: “EV drivers should pay – but it should come at the right level and the right time. Now would be far too soon – EVs represent only 4% of cars on our roads and a tax would raise a minimal amount until this number is bigger.
“As we’ve seen in other countries, introducing a charge now would stifle the growth we’ve seen over the past years, and be self-defeating. What is needed is a considered plan for the best and fairest way for all road users to handle the change in vehicle mix over time.”
The Society of Motor Manufacturers and Traders (SMMT) said in a statement: “We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK’s EV transition, this would be entirely the wrong measure at the wrong time.
“Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake – deterring consumers and further undermining industry’s ability to meet ZEV mandate targets, with significant ramifications for perceptions of the UK as a place to invest.
“A smarter, fair and future-ready taxation system requires a fundamental rethink – one that must be done in full partnership with the industry and other stakeholders.”
