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UK plans opt-in mileage tax for electric and hybrid cars in 2028
The Government plans to use newer cars’ built-in connectivity to calculate a pay-per-mile tax for electric and hybrid vehicles from April 2028. Ministers say drivers would opt in and that the system would not report where or when journeys take place, but critics warn that digital mileage monitoring could threaten privacy and expand over time.
The charge is set at 3p per mile for fully electric cars and 1.5p for hybrids, on top of standard vehicle excise duty. It will rise annually with inflation from April 2029; an electric-car driver covering 10,000 miles a year would pay about £300 extra. The tax is intended to offset falling fuel-duty receipts, while the Treasury has yet to explain how the system will work or what safeguards will protect drivers’ data.
In short
- Pay-per-mile tax for electric and hybrid cars starts in April 2028.
- Rates are 3p per mile for electric cars and 1.5p for hybrids.
- Ministers say digital mileage reporting will be opt-in.
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The case for
A mileage-based charge could help replace fuel-duty revenue as more drivers switch to electric cars, keeping the tax burden on road use more consistent across vehicle types. The proposed rates are set out in advance, and an opt-in system that records only mileage rather than journey details could raise revenue while limiting privacy risks.
The case against
Even if the initial system records only mileage, using connected cars to measure it could create privacy risks if data access or safeguards are unclear, and critics may worry that the system could later expand. With the technical arrangements and protections not yet explained, drivers may reasonably question whether opting in is meaningful and whether the data will remain limited to calculating the charge.
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Originally published by Daily Mail as “Spy under the bonnet: Labour to use electric cars’ satnavs to record mileage and calculate road tax”.