Spy Under the Bonnet? What Car Tracking for Road Tax Could Mean for You

Your car already knows a lot about you. It knows where you parked last night, how hard you brake and which Bluetooth phone you connect to. Now, according to the Daily Mail, ministers are weighing up whether that same connected technology could be used to count your miles and work out your road tax.

The paper's headline talks about a "spy under the bonnet". That is punchy, but the real story is more nuanced and more important for anyone who owns, or plans to own, a modern car. Here is what is reportedly on the table, where the law currently stands, and what you can sensibly do now.

What has been reported

The Daily Mail says the government is considering using connectivity systems in newer cars to record mileage and calculate road tax, as part of plans outlined in the Budget. The report is about options under consideration, not a finished scheme with a start date and a rulebook.

The background is the Budget's move towards charging electric vehicles by distance. The government announced an electric vehicle excise duty (eVED), a per-mile charge for electric cars and a lower one for plug-in hybrids, due to start in 2028. We have covered the rates and timetable in our earlier explainers on pay-per-mile tax, so we will not repeat them here. The question this story raises is a different one: how do you actually measure the miles?

That is harder than it sounds. Possible methods include:

• Odometer readings submitted by the owner, or captured at the annual MOT.
• A plug-in or fitted tracking box, as used by some insurers.
• Data pulled from the car's own connectivity system, which is what the Mail reports is being considered.

The third option is the one that has set off the privacy alarm bells, and it is worth understanding why.

Why it matters

The scale of the "connected car"

Many newer cars have an embedded SIM or modem that sends data back to the manufacturer. It is how remote locking apps, live traffic, over-the-air updates and breakdown alerts work. Mileage is just one number among a much larger stream that can include location, speed, driving style and charging history.

Using that infrastructure to tax drivers would be efficient. There would be no extra hardware and no need for drivers to submit readings. Efficiency, though, is only one side of the argument.

The fairness question

If mileage collection relies on connectivity built into newer cars, older vehicles and cars with the connection disabled would need a different route. A system that works neatly for a three-year-old EV but not for a ten-year-old one raises obvious questions about consistency and about who bears the administrative burden. Any scheme would need a fallback, and the details of that fallback matter.

The trust question

Road tax has traditionally relied on a simple link between a vehicle and a keeper. A mileage-based system introduces a continuous flow of information about how people live. Even if the state only receives a single monthly figure, drivers will want to know who holds the raw data, for how long, and for what other purposes it might be used.

The legal angle

Because this is still a proposal, there is no specific "mileage tracking law" yet. But existing law already frames how any such scheme would have to operate.

Vehicle tax is a legal duty

Under the Vehicle Excise and Registration Act 1994, the registered keeper is responsible for ensuring the vehicle is taxed, or declared off the road with a SORN. Any new per-mile charge would need to be built into legislation, so expect Parliament to debate it. The Budget set the direction, but the machinery of collection would need its own legal footing.

Data protection law would be central

Mileage linked to a vehicle registration and a named keeper is personal data. Location data is even more sensitive in practice. Under UK GDPR and the Data Protection Act 2018, anyone collecting that data must:

• Have a lawful basis for doing so.
• Collect only what is necessary for the stated purpose (data minimisation).
• Use it only for that purpose (purpose limitation).
• Keep it no longer than needed and keep it secure.
• Be transparent about what they are doing.

This is where design choices become critical. A system that transmits a single cumulative mileage figure is very different, legally and ethically, from one that transmits a trail of GPS coordinates. A scheme built around the minimum necessary data would be far easier to defend than one that gathered everything and promised to ignore most of it.

Your existing rights

If your car is connected, you already have rights regarding the data held about you. Under UK GDPR you can ask an organisation what personal data it holds (a subject access request), and in certain circumstances ask for it to be corrected or erased. The Information Commissioner's Office (ICO) is the regulator and its website explains how these requests work. Article 8 of the European Convention on Human Rights, the right to respect for private life, also underpins the wider debate, although how it would apply to a specific scheme would depend on the final design.

Odometers and honesty

Any system that links mileage to money creates an incentive to under-report. It is already a criminal matter to tamper with a mileage reading to deceive, for example when selling a car, and fraud law applies. A tax based on mileage would add a new reason for the authorities to care about accuracy. Expect enforcement measures, which is part of why connected data is attractive to policymakers: it is harder to fiddle than a number typed into a form.

What drivers should know now

None of this is law yet, so the practical advice is about being informed rather than alarmed. This is general information, not legal advice for your own circumstances.

1. Find out what your car actually transmits

Check the manufacturer's app and the privacy settings in the infotainment menu. Many drivers have never opened them. Look for what data-sharing options you agreed to at purchase and whether any can be switched off. Be aware that switching off connectivity can disable features such as remote climate control or emergency call services, so read the descriptions carefully.

2. Read the privacy notice, not just the brochure

Manufacturers must tell you what they collect and why. If you cannot understand it, you are entitled to ask, and you can make a subject access request if you want to see the data held about you.

3. Keep your mileage evidence tidy

Whatever system emerges, an accurate paper trail helps. Keep MOT certificates, service records and invoices, which all record odometer readings. You can check a vehicle's MOT history, including past mileage readings, free on GOV.UK. If a mileage-based charge ever comes in, being able to show a consistent history will help if a figure is ever disputed.

4. Buying or selling? Clean up the digital side

If you sell a connected car, log out of the manufacturer app, remove your account and wipe personal data from the infotainment system. If you buy a used connected car, make sure the previous owner's account is no longer linked to it. This is good privacy hygiene now, and it would matter even more if car data fed into tax.

5. Be sceptical of headlines and scam messages

Whenever a tax change is in the news, scammers follow. The DVLA and HMRC will not ask you for payment details via a text message with a link. Use only official GOV.UK pages for anything related to vehicle tax. Our earlier piece on the DVLA warnings and deadlines is a good reminder of how genuine enforcement notices look.

6. Have your say

Major changes to tax collection are usually accompanied by consultations. If one opens on how mileage should be measured, responding is a straightforward way for drivers to raise concerns about data and fairness, and consultations are published on GOV.UK.

Looking ahead

The sticking points will probably be these.

Choice versus compulsion. One likely model is to offer drivers options, such as submitting odometer readings or opting into a data-sharing arrangement. A fully mandatory connected-data system is a much bigger political ask.

Who holds the data. Whether information flows via manufacturers to the Treasury, or whether a government body receives only a summary, will shape public acceptance. The less raw data leaves the vehicle, the easier the privacy case becomes.

Older cars and the digital divide. Any scheme has to work for drivers without the newest technology, without penalising them for it.

Mission creep. Once a pipeline of vehicle data exists, there will be pressure to use it for other things, such as enforcement of insurance, MOT or road-safety rules. Campaigners will want clear legal limits on secondary uses, and the existing purpose limitation principle in data protection law is the obvious hook for that argument.

It is also worth remembering that this is, for now, a report about what ministers are considering. Plans can be refined, delayed or dropped once the practicalities and public reaction become clear. The Budget set a direction of travel for taxing electric vehicles by distance, but the method of measurement is still an open question.

The bottom line

The "spy under the bonnet" headline captures a genuine tension. The technology to measure mileage cheaply and accurately already exists in many modern cars, and it makes sense for policymakers to look at it. But a car is not just a vehicle, it is a record of where you go. The legal framework, particularly UK data protection law, should be doing a lot of work to ensure that tax is collected without turning every journey into a data point.

For now, the best thing drivers can do is understand what their car already shares, keep good records, and watch for official consultations. If the plan moves from "being considered" to "being legislated", the details will matter far more than the headline.

This article is general information about UK motoring and tax rules and does not constitute legal advice. For decisions about your own circumstances, consult official GOV.UK guidance, the ICO, or a qualified professional.