Electric Vehicle Excise Duty, or eVED, is not due to start until 1 April 2028. That can make it feel like a problem for future-you.
But the latest government consultation detail makes one thing clear: this is not just a new line on the motoring tax bill. It is also a mileage admin change. UK electric car and plug-in hybrid drivers are expected to estimate annual mileage, pay against that estimate through the normal VED process, then reconcile against actual mileage later.
If that sounds familiar, it is because drivers already estimate annual mileage for insurance. The difference is that eVED would attach a real tax cost to the gap between what you thought you would drive and what you actually did.
What eVED is expected to change
HM Treasury's consultation says eVED will apply to UK-registered battery electric cars and plug-in hybrid cars from April 2028, alongside existing Vehicle Excise Duty.
The proposed starting rates are:
- 3p per mile for fully electric cars
- 1.5p per mile for plug-in hybrids
- Inflation-linked uprating from 2029-30 onwards
Electric vans, buses, coaches, motorcycles and HGVs are not expected to be in scope at launch. The initial scheme is aimed at cars.
For a fully electric car covering 8,000 miles a year, 3p per mile works out at £240 a year, or about £20 a month. That is still below the fuel-duty equivalent quoted for an average petrol or diesel car, but it is enough to make accurate mileage estimates worth caring about.
How the estimate and reconciliation could work
The important bit for drivers is the process. The consultation says eVED would be integrated into the existing VED system, administered by DVLA, rather than becoming a completely separate tax portal.
In plain English, the expected annual flow looks like this:
- At VED renewal, enter the car's current mileage reading.
- Estimate how many miles you expect to drive during the next tax period.
- Pay the estimated eVED charge alongside VED, either upfront or spread through the year.
- At the end of the period, submit actual mileage for reconciliation.
- If you drove more than estimated, DVLA calculates a balancing payment.
- If you drove less, DVLA expects to carry a credit forward against the next period.
The government says motorists should also be able to update predicted mileage during the VED year, which matters if your pattern changes because of a new job, a longer commute, more client visits or a change in family driving.
No trackers, but odometer records still matter
A lot of the public reaction to pay-per-mile motoring tax focuses on privacy. The consultation is explicit that eVED would not require trackers in cars and would not require drivers to report where or when miles are driven.
Instead, the system is based on mileage readings. For cars old enough to need an MOT, that usually means the annual MOT mileage record. For newer cars, the consultation describes mileage checks around the first and second registration anniversaries, before the normal MOT cycle begins.
That is a useful distinction. eVED is not asking for a route-by-route diary. But it does make the odometer reading, and your own understanding of how those miles build up, more important.
Why a mileage log helps before the rules arrive
Most drivers can guess their annual mileage roughly. The problem is that rough guesses are often built from old habits: a previous commute, last year's workload, or an insurance estimate that has quietly become stale.
A simple mileage log helps you see what is really happening now. Before eVED starts, it can help you answer questions such as:
- How many miles do you actually drive in a normal month?
- How much of that is business mileage, commuting or personal use?
- Are there seasonal spikes, school-holiday trips or client-heavy months?
- Has home working, a job change or a new charging routine changed your annual total?
- Would your current insurance mileage estimate still be realistic?
That is especially useful for EV drivers who already track charging costs. A per-mile tax does not replace electricity costs; it sits beside them. Your real running cost becomes a combination of charging, VED, eVED, insurance and maintenance, not one neat number.
Business drivers should separate journey types early
For business and mixed-use drivers, the takeaway is even stronger. If you use an EV for client visits, site work, deliveries, volunteering, or occasional business trips, it is worth keeping business and personal journeys separate now.
eVED itself is based on the car's total mileage, not on whether a mile was business or private. But clean journey records make it easier to:
- claim or evidence business mileage accurately
- compare reimbursement against charging and tax costs
- budget for higher-mileage years
- explain usage clearly if the car is shared, leased or salary-sacrificed
If the annual odometer total says you drove 13,000 miles, it is much better to know why than to discover it at renewal and wonder where the year went.
How this differs from the earlier pay-per-mile debate
There has already been plenty of general discussion about whether EV pay-per-mile tax is fair. That debate is not going away.
This article is focused on the more practical next step: how drivers may have to estimate, pay and reconcile mileage. The main question is not simply "will EVs be taxed per mile?" It is "how do I avoid my annual mileage estimate becoming a messy surprise?"
That makes the record-keeping angle distinct. The policy headline is the 3p-per-mile charge. The day-to-day driver problem is remembering, estimating and explaining mileage well enough that the bill matches reality.
What to do now
You do not need to overhaul your driving life in 2026 because of a 2028 tax. But it is sensible to build the habit before it matters.
- Check your last MOT mileage history and compare it with your insurance estimate.
- Track journeys for a few months to find your real monthly average.
- Separate business and personal mileage if you use the car for both.
- Review the estimate whenever your commute, work pattern or charging routine changes.
- Keep charging costs and mileage in the same place where possible.
The practical win is not just a neater eVED renewal. It is a better view of what your EV actually costs per mile.
By the time eVED arrives, drivers with a reliable mileage history will be in a much better position than those trying to rebuild a year from memory. Future-you will be grateful. Possibly even smug, which is allowed in moderation.
Sources
- GOV.UK: Consultation on the Introduction of Electric Vehicle Excise Duty (eVED)
- HM Treasury: eVED consultation PDF
- House of Commons Library: Electric vehicle excise duty (eVED)
Track every mile with less faff
Ready to keep your EV mileage, trips, and running costs tidy?
Mileage Tracker helps you log journeys, stay on top of costs, and keep cleaner records for work or personal driving.