£300 a Year to Drive an EV? What the Mileage Charge Really Means

Most drivers can do the maths on a tank of petrol in their head. Far fewer have worked out what a pence-per-mile road charge would do to their budget. A Birmingham Mail report, headlined "Andy Burnham and John Healey £300 charge for drivers doing 10,000 miles a year", puts a figure on it. The proposed rates are 3p per mile for electric vehicles and 1.5p per mile for plug-in hybrids, so an EV covering 10,000 miles would pay £300.

The sum is easy. What it means for different households, and what it means for the law, takes more unpicking.

What the report says

According to the Birmingham Mail, the proposal is a mileage-based charge:

• 3p per mile for fully electric vehicles
• 1.5p per mile for plug-in hybrids
• £300 for an EV covering 10,000 miles in a year

The policy is the electric vehicle excise duty (often shortened to eVED) set out in the Autumn Budget 2025, with a planned start in April 2028. The headline links the story to Andy Burnham and John Healey, but the charge itself is a Treasury measure. If you want to know exactly what each politician said or backed, read the original Birmingham Mail article rather than relying on a summary, including this one.

Doing the sums for your own driving

The charge is simple arithmetic, so it is worth running it for a few typical patterns. These are illustrations, not forecasts of what you will pay.

| Annual mileage | EV at 3p/mile | Plug-in hybrid at 1.5p/mile | |---|---|---| | 5,000 | £150 | £75 | | 8,000 | £240 | £120 | | 10,000 | £300 | £150 | | 12,000 | £360 | £180 | | 15,000 | £450 | £225 |

The first thing to notice is that the charge falls hardest on high-mileage drivers. A rural commuter, a sales rep or a self-employed tradesperson in an electric van would pay several times what a occasional city driver pays. Many of those drivers switched to electric because the running costs suited their heavy use. A per-mile charge trims that advantage in direct proportion to how much they drive.

The second point is that low-mileage households barely feel it. Someone doing 4,000 miles a year pays around £120, which is modest next to insurance or depreciation.

How it compares with petrol duty

An EV driver pays no fuel duty at the moment, which is the gap the Treasury is trying to close. As a rough illustration, take a petrol car that manages 40mpg and covers 10,000 miles. That uses roughly 1,136 litres of fuel. At the headline fuel duty rate of 52.95p a litre (which may change, so check the current rate), that is around £600 in duty alone, before VAT is added on top.

On that basis a £300 EV charge is about half the duty an average petrol driver pays. So EVs would still be taxed more lightly per mile than petrol cars, but no longer untaxed. Whether that remains fair as the market shifts is the heart of the debate. Your own figures will differ with your car's efficiency and how much you drive.

Plug-in hybrids sit in an awkward spot. Their owners already pay fuel duty when running on petrol, and the 1.5p rate is meant to reflect that part-electric use. Critics have questioned whether hybrid drivers who rarely plug in should pay at all.

Why it matters beyond the headline

It changes the running-cost story. For years the pitch for EVs has been cheap miles, cheap tax and cheap servicing. A mileage charge gives drivers a clear per-mile cost to set against their electricity or public charging bills. If you charge at a public rapid charger, you are already paying a premium per unit, and the road charge adds to it. Our post on pay-per-mile tax for EVs covers the start date and basics, so here the focus is on the practical effects.

It affects used-car values. Buyers of second-hand EVs often look at total cost of ownership. A known per-mile charge becomes one more factor, and high-mileage cars could look slightly less attractive to some buyers. It is too early to say how markets will respond, and nobody should present a prediction as fact.

It puts a spotlight on mileage. Under a scheme like this, your odometer reading stops being a detail for the MOT and becomes a number that costs you money. That has consequences for honesty, enforcement and privacy.

The legal angle

This is general information, not legal advice, and the final rules are not yet in force. Still, some legal points are worth understanding.

It needs legislation. A new charge of this kind has to be set out in law, normally through a Finance Bill, and secondary legislation would then handle much of the detail. Rates, exemptions and the collection method can change between an announcement and the final rules. Treat today's figures as proposals.

Vehicle tax is a legal duty. Under the Vehicle Excise and Registration Act 1994, keeping a vehicle on a public road without it being taxed is an offence, and the DVLA already uses automatic number plate recognition and its records to enforce this. Any mileage element would probably be collected alongside existing vehicle tax, so the enforcement machinery is already there. The exact mechanism has not been confirmed, so watch for official guidance.

Odometer accuracy matters. Mileage-based systems rely on trustworthy readings. Deliberately winding back an odometer, often called clocking, is already a serious matter. It can amount to fraud and can breach consumer protection law when a car is sold. If a charge depends on the reading, the incentive to tamper grows, and so does the likelihood of enforcement. Anyone buying a used EV should check the car's MOT history on GOV.UK, which records odometer readings at each test, and look for jumps or drops.

Data and privacy. Any scheme that records or reports mileage engages data protection law, including UK GDPR and the Data Protection Act 2018. There is a difference between a simple odometer reading once a year and continuous location tracking. The way the charge is collected will decide how much personal data is involved. Drivers are entitled to ask what is collected, why and for how long.

Disputes and errors. If a charge is based on an estimate or a wrong reading, drivers will need a route to challenge it. We do not yet know what appeal process, if any, would apply. Compare this with parking enforcement, where there are clear statutory appeal routes for council penalties. A new road charge should have equivalent safeguards, and campaigners are likely to press for them.

What drivers should do now

Nothing here requires action today, but a little preparation costs nothing.

1. Know your annual mileage. Check the odometer readings on your last few MOT certificates, which are on the free GOV.UK MOT history service. Divide the difference by the years between tests. That is your baseline for any per-mile calculation.
2. Run your own numbers. Multiply your mileage by 3p (EV) or 1.5p (plug-in hybrid) and add it to your charging costs. Compare that with petrol or diesel running costs for a similar car. Include insurance and depreciation for a fair picture.
3. Think about charging habits. If you own a plug-in hybrid, how often you run on electric will affect whether the 1.5p rate feels fair. Our post on what EV owners should know about eVED goes through the tax changes in more detail.
4. Keep records if you drive for work. Business drivers should keep clear mileage logs. How the charge interacts with business expenses, company cars and salary sacrifice is still unclear, so an accountant or the relevant HMRC guidance is the right place to check before making big decisions.
5. Be wary when buying second-hand. Check mileage history, service records and MOT readings. Treat an unexplained fall in recorded mileage as a red flag.
6. Watch for official consultations. Governments often consult on the detail of new taxes. Responses from drivers, fleets and rural communities can and do shape the final policy.

Looking ahead

The mileage charge is a response to a real problem. As more drivers switch to electric, the revenue from fuel duty falls, and the Treasury wants a replacement. The difficulty is doing it without discouraging the switch that other parts of government policy are trying to encourage. That tension runs through the whole debate.

Several questions remain open:

• Will rates change? The 3p and 1.5p figures are proposals with a start date that is still some way off. Rates could be adjusted, indexed or reviewed.
• How will it be collected? Whether it is an annual declaration, a bill with vehicle tax, or something more technical will determine how burdensome and how open to abuse it is.
• Will it extend to petrol and diesel? Some commentators think a full road-pricing system is where this ends up. That is speculation. For now, the proposal covers electric and plug-in hybrid vehicles only.
• What about rural and low-income drivers? People with little access to public transport may feel the charge more, and calls for exemptions or discounts are likely.

The headline £300 figure makes a complicated policy feel concrete, and that is useful. It is a helpful benchmark, not a bill that anyone is yet obliged to pay. Between now and 2028, the rules will be debated, adjusted and set out in law. Drivers who understand their own mileage and costs will be in the best position to judge how it affects them, and to make their voices heard while the detail is still being decided.

This article is general information about UK motoring rules and policy proposals, not legal or financial advice. For decisions affecting your own circumstances, consult official GOV.UK guidance or a qualified professional.