British motorists could soon see a fundamental shift in how they are taxed for using the roads, with proposals for a new pay-per-mile system reportedly under government consideration.
The Proposed Pay-Per-Mile System
The new system would primarily target electric vehicle (EV) owners who currently avoid paying fuel duty, creating a significant shortfall in Treasury revenue. With the 2030 ban on new petrol and diesel cars approaching, officials are exploring ways to plug this growing tax gap.
Reports suggest that EV drivers could face a charge of 3p for every mile they drive. For an average motorist covering 10,000 miles annually, this would translate to an additional £300 per year in motoring costs. Further details about the scheme might be announced during the upcoming Budget statement.
Who Would Be Most Affected?
The proposed changes would disproportionately impact certain groups of drivers. Those with longer commutes or living in rural areas with limited public transport alternatives would face the highest financial burden.
Rhydian Jones, a motoring expert at Confused.com car insurance, highlighted the potential for variable rates: "Commuters, families, and those living in rural areas who could face higher costs as they take longer and more frequent journeys. Those who drive longer distances or during peak hours could be hit hardest if variable rates apply depending on time."
Industry Reaction and Concerns
The potential changes have drawn criticism from industry leaders concerned about the impact on EV adoption. Tanya Sinclair, CEO of Electric Vehicles UK, warned: "The Government must take the time to consult properly, design carefully and communicate transparently, a process that will take years, not months."
She added that rumours about pay-per-mile only unsettle drivers and risk slowing the very market we need to grow, particularly as much of the public remains uncertain about switching to electric vehicles.
The timing of such a significant tax change could prove controversial, coming at a time when the government is actively encouraging drivers to make the transition to electric vehicles ahead of the 2030 deadline for banning new petrol and diesel cars.
