Pay-Per-Mile Road Tax (eVED): What UK Drivers Need to Know About 2028

The UK’s road tax system is heading for its biggest overhaul in decades. As electric vehicles replace petrol and diesel cars, the government faces a growing hole in its tax revenue — and pay-per-mile road pricing is the leading solution.

Electronic Vehicle Excise Duty (eVED) is the working name for a mileage-based road tax system planned for introduction from April 2028. This article covers what has been confirmed, what is still speculation, and what it could mean for your wallet.

1. Why It’s Happening

The UK government currently raises approximately £25 billion per year from fuel duty and a further £7 billion from Vehicle Excise Duty. As the fleet transitions to electric vehicles, fuel duty revenue is declining rapidly — EVs don’t use petrol or diesel, so they don’t pay fuel duty.

The government’s own projections suggest that by 2035, when the ban on new petrol and diesel car sales takes effect, fuel duty revenue could fall by 50% or more from current levels. That’s a £12+ billion annual gap that needs to be filled.

The flat-rate VED system (everyone pays £190/year) doesn’t scale with usage. Someone who drives 3,000 miles a year pays the same as someone who drives 30,000. Pay-per-mile is seen as a fairer, more sustainable alternative.

2. What eVED Is

eVED (electronic Vehicle Excise Duty) is the proposed replacement for flat-rate road tax. Instead of paying a fixed annual amount, you would pay based on how many miles you drive.

The core principle is straightforward: the more you use the roads, the more you pay. This aligns road taxation with road usage in a way that the current system does not.

Confirmed: The government has committed to introducing a mileage-based road pricing system. Not yet confirmed: The exact rate per mile, the technology used to track mileage, and whether it will fully replace or sit alongside the current VED system.

3. When It Starts

The target date is April 2028, with the initial rollout expected to apply to new electric vehicles only. The broader timeline looks something like this:

The phased approach means that most existing car owners will not be immediately affected. If you currently own a petrol or diesel car, you will likely continue paying flat-rate VED for several years after eVED launches.

4. How It Might Work

Several methods for tracking and charging mileage are under consideration:

• GPS telematics — a device or built-in system that tracks miles driven in real time. Most accurate but raises the biggest privacy concerns
• Annual odometer reading — mileage checked at MOT time (or self-declared for newer cars exempt from MOT). Simpler but less precise
• Connected car data — most new cars already transmit mileage data to manufacturers. This could be shared with DVLA
• Self-declaration with spot checks — drivers report their mileage annually, with random audits and MOT verification

The government consultation has explored all of these options. Industry analysts expect a hybrid approach — telematics for new vehicles, with odometer readings at MOT as a fallback for older cars.

5. Estimated Costs

Exact rates have not been confirmed. However, based on government consultation documents and independent analysis, estimates suggest:

For context, the current flat-rate VED is £190/year. At 3p per mile, the average UK driver (7,400 miles/year) would pay approximately £222 — about £32 more than today. Low-mileage drivers would save money; high-mileage drivers would pay significantly more.

6. Privacy Concerns

GPS-based mileage tracking is the most controversial aspect of pay-per-mile. The key concerns include:

• Location tracking — GPS systems know not just how far you drive, but where and when
• Data storage — who holds the mileage data, how long is it kept, and who can access it
• Government surveillance — fears that mileage data could be used for purposes beyond taxation
• Data breaches — centralised mileage data would be a high-value target for hackers
• Opt-out options — whether drivers can choose a non-GPS alternative (e.g., odometer readings)

Privacy campaigners have argued strongly for odometer-based systems that record total mileage without tracking location. The government has acknowledged these concerns but has not committed to a specific approach.

7. How It Affects Buying Decisions Now

With pay-per-mile still two years away, should it change what car you buy today? Here are the key considerations:

• Low-mileage drivers — pay-per-mile could save you money compared to the current £190 flat rate. No need to rush
• High-mileage drivers — you will likely pay more under eVED. Buying now and staying on the flat rate for as long as possible could save money
• EV buyers — EVs registered before April 2028 may stay on the flat rate initially, though the government may transition all vehicles eventually
• Used car buyers — older cars are likely to be among the last to move to eVED, giving you more years on the flat rate

8. What Other Countries Do

The UK is not the first country to explore pay-per-mile road pricing. Several countries have already implemented or trialled similar systems:

New Zealand’s system is often cited as the most relevant model for the UK. It uses odometer readings rather than GPS, which addresses many privacy concerns. Drivers purchase road user charges in advance (in blocks of 1,000km) and must display a valid licence on their vehicle.

Final Thoughts

Pay-per-mile road tax is coming to the UK. The question is not if, but when and how. The current flat-rate VED system was always a temporary measure — it cannot sustain road funding as EVs replace combustion engines.

For now, the best advice is to stay informed but not make hasty decisions. The details of eVED could change significantly between now and 2028. Focus on the car that meets your needs today, and keep an eye on government announcements as the legislation takes shape.

We will update this article as new information is confirmed.

This article contains both confirmed government plans and speculative analysis based on consultation documents. Nothing in this article constitutes financial or legal advice. For the latest official information, visit gov.uk/vehicle-tax.