How much EV drivers will be taxed under Reeves’s pay-per-mile plan
Government announces plan to make system fairer
Electric vehicle drivers might be required to fork out for a pay-per-mile tax under plans set to be announced in the Autumn Budget.
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Rachel Reeves is thought to be set to confirm the rise in the financial statement, when it is made on November 26.
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A government source told the media: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles. We want a fairer system for all drivers.”
Tory shadow chancellor Mel Stride fired back: “With Labour’s cost of living crisis, now is not the time to hit hard-working families and businesses with another tax raid.”
Here is what it could mean for electric vehicle owners.
What is being proposed?
Ms Reeves is looking for a method of bringing in around £20bn and £30bn by the end of parliament and is suggesting charging 3p per mile on top of other road taxes.
Under the plans, the scheme will begin in 2028 after a consultation - with the new levy intended to claw back money amid falling fuel tax revenues.
It is expected that around six million people will be driving electric vehicles (EV) by the year that rate is set to come in.
The move is set to raise £1.8billion by 2031 and will be needed, the government argues, as lost petrol revenue will amount to around £12bn
How much will I have to pay?
EV drivers will be charged 3p per mile on top of other road taxes, according to the Telegraph.
This will see a difference of around £3 for every 100 miles, the distance from Oxford to Cambridge, or £12.10 from London to Edinburgh.
How does this compare to other cars?
The Treasury is set to frame the changes as a way to even up taxes between drivers of petrol and electric cars - selling it as a “fairer system”.
Currently, petrol and diesel drivers are paying £600 on average more than their EV equivalents.
As a result, sales of both types of traditional fuel have dipped, while electronic alternatives have risen, with the new Electric Car Grant launching in July.