Pay-per-mile tax: what a £300 average bill could mean for your wallet

Three hundred pounds is not a figure that gets lost in the small print. When The Mirror ran its headline about a DVLA-linked pay-per-mile tax averaging £300, it landed with a lot of drivers who had only half-followed the story until then. Is this a new charge? Does it hit petrol and diesel drivers too? And what is this "tool" everyone is talking about?

This post unpicks what we know, what we don't, and what it could mean for your costs and your rights. It is general information, not legal or financial advice.

What the story says, and what it doesn't

According to The Mirror's report, the government is developing a new tool connected to a pay-per-mile tax, and the headline puts the average cost to drivers at around £300. The report's summary is brief on the mechanics, so we shouldn't pretend to know more than it tells us. How the tool works, who runs it, and exactly how the £300 is calculated are questions to check against the original article and official government announcements.

What we can do is place the story in its policy context, which is well documented.

The background: why pay-per-mile exists at all

The policy behind the headline was announced in the November 2025 Budget as electric vehicle excise duty, often shortened to eVED. As announced, it works like this:

• Pure electric cars would pay 3p per mile.
• Plug-in hybrids would pay 1.5p per mile, reflecting that they also burn fuel and so already pay fuel duty.
• The charge is due to begin in April 2028.

The logic is a funding gap. Petrol and diesel drivers contribute to the Treasury through fuel duty every time they fill up. Electric car drivers largely don't, and as more people switch, that revenue shrinks. Pay-per-mile is the government's answer, and it ties the bill to how far you drive rather than just what you drive.

Where might £300 come from?

A rough bit of arithmetic helps. This is our illustration, not The Mirror's workings, and your own mileage will differ:

| Annual mileage | Pure EV at 3p/mile | Plug-in hybrid at 1.5p/mile | |---|---|---| | 5,000 | £150 | £75 | | 10,000 | £300 | £150 | | 12,000 | £360 | £180 |

So a £300 "average" is consistent with someone covering around 10,000 miles a year in an electric car at the announced 3p rate. If you drive less, you would pay less. If you drive a lot, such as a long-distance commuter, a rural driver with few alternatives or someone doing regular business mileage, the bill rises quickly.

This is also on top of the standard vehicle tax that electric cars have paid since April 2025, so the real picture for EV owners is a stack of charges rather than a single new one.

Why it matters beyond the headline

It changes the sums on going electric. Part of the case for an EV has always been lower running costs. A per-mile charge doesn't wipe that out, but it narrows the gap, particularly for high-mileage drivers. The effect is strongest for people who rely on public charging, which is already pricier than charging at home.

It lands unevenly. A city driver doing a few thousand miles a year and a rural worker with no train line within 20 miles are in very different positions. A per-mile charge is arguably fairer in principle because it tracks road use, but it can feel punitive for people with little choice about how far they travel.

It affects the used market. Buyers of second-hand EVs and plug-in hybrids will increasingly weigh up running costs, and mileage becomes a more important number than ever. We'll come back to why that matters legally.

It opens a wider debate. Once a government has a system for charging by distance, the question of whether petrol and diesel cars should eventually be included is not far behind. Nothing in the announced policy says that will happen, but it is a debate worth watching.

For more on the policy itself, our earlier explainers on the 3p pay-per-mile road tax and the electric vehicle tax changes and VED cover the start date and rates in more detail.

The legal angle

The details of how this will be collected are still being worked out, so much of the legal picture is about what to watch rather than what is settled. A few points are reasonably clear.

It needs legislation. Vehicle tax in Great Britain sits under the Vehicle Excise and Registration Act 1994. Introducing a mileage-based charge on top of that means Parliament has to agree the detail, which is why rates, exemptions and enforcement rules could still shift before April 2028. Treat any figure you read today as a statement of current intent, not a final bill.

Mileage evidence will carry more weight. If you are charged by the mile, someone has to establish how many miles you have driven. Annual MOT readings, odometer checks and possibly other data sources are obvious candidates, though we don't yet know which will be used. A higher price on each mile creates an incentive to tamper with odometers. Deliberately falsifying a mileage reading can amount to fraud under the Fraud Act 2006, and "clocking" a car is also a serious problem for buyers. If you are buying second-hand, checking the mileage history is sensible whatever happens with the tax.

Privacy and data protection. If the system involved telematics or other forms of tracking, UK GDPR and the Data Protection Act 2018 would apply. That would raise questions about what data is collected, how long it is kept and who can access it. The Information Commissioner's Office is the regulator to look to for guidance on those rights.

Enforcement and disputes. DVLA already has robust powers over vehicle tax, including automatic enforcement using ANPR cameras and, in some cases, clamping. How a pay-per-mile charge would be enforced, and how you would challenge an incorrect mileage figure, hasn't been spelled out in the source material. If you believe a DVLA record is wrong, the starting point is always the official channels on GOV.UK, and for serious disputes, independent legal advice.

What drivers should know now

1. Don't panic, but don't ignore it. April 2028 is some way off, and details may change. The sensible move is to stay informed rather than make a rushed decision.
2. Work out your own number. Take your annual mileage, which you can often find from MOT history, and multiply by the announced rate. That gives you a personal estimate far more useful than a national average.
3. Keep your mileage records tidy. MOT certificates, service invoices and dated dashboard photos create a simple paper trail. If a mileage figure is ever disputed, evidence beats memory.
4. Check MOT history before buying used. The free MOT history service on GOV.UK shows recorded mileage at each test. Sudden drops or odd gaps are a red flag.
5. Plug-in hybrid owners, check which category you are in. The announced rate is half that of pure electric cars, so confirm how your vehicle is classed once the rules are final.
6. Watch for scams. Whenever DVLA or tax changes hit the news, scammers follow with fake texts and emails about "new charges" or "tax payments". Deal only through GOV.UK, and be wary of any message pushing you to click a link or pay urgently. Our guide to DVLA enforcement and what to do about vehicle tax is a useful reference for what genuine enforcement looks like.
7. Think about the whole running cost. If you are weighing an EV against a petrol car, compare charging costs, vehicle tax, insurance and now an estimated per-mile charge side by side, not just the pump or plug price.

Looking ahead

Expect more detail over the coming months. The government has indicated that the finer points, including how the charge will be collected, will be developed and consulted on, and the "tool" in The Mirror's story is presumably part of that. When that detail arrives, the questions to ask are simple:

• How is my mileage measured, and can I check it?
• What happens if the figure is wrong?
• What data is being collected about me?
• Does the rate rise over time?
• Are there exemptions for people such as disabled drivers, rural residents or small businesses?

The wider direction of travel is clear. As fuel duty income falls with the shift to electric vehicles, road taxation is being rethought, and distance-based charging is now firmly on the table. For individual drivers, the honest takeaway is that a £300 headline figure is a starting point for your own calculation, not a bill with your name on it. Do your own sums, keep your records, and rely on official sources when the final rules arrive.

This article is general information about UK motoring rules and policy, not legal advice. For decisions affecting your own circumstances, check official guidance on GOV.UK or speak to a qualified adviser.