Electric vehicle owners to face pay-per-mile tax

A new tax on electric and hybrid vehicles has been confirmed in a leaked report outlining the UK’s economic and fiscal outlook ahead of the budget.

The Office for Budget Responsibility (OBR) document said the charge means electric car drivers will pay a road charge of 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile from April 2028, with rates rising each year with inflation.

The government hopes to raise £1.4bn through the new tax, which is “half the fuel duty rate paid by petrol car drivers”, the report states.

In a statement, the OBR apologized for the leak and said it was investigating the error.

Under the measures, an electric car driver who travels 8,500 miles in the 2028-29 financial year is expected to pay around £255 – around half the cost per mile paid by petrol and diesel drivers in fuel tax.

AA chief executive Edmund King said: “The Budget has put motorists at a crossroads and the chancellor has announced significant tax proposals for electric vehicle owners.

“Motorists fully understand that the government needs to strike the right balance between raising money for road investment while ensuring it does not slow the transition to electric cars to meet environmental targets.”