The Chancellor is set to announce a new pay-per-mile tax regime for electric vehicle drivers.
Under the scheme EV drivers could be charged 3 pence per mile in an attempt to plug the gap in fuel duty revenue.
£250 a year average
Electric vehicle owners could be forced to pay an average of around £250 a year more on top of existing driving costs if the scheme is introduced.
The tax would see EV drivers paying an extra £24 for a drive between John o’Groats and Land’s End.
Under the scheme, EV drivers would be required to submit estimates of the mileage they expect to drive each year and pay a corresponding fee.
Those who drive under the estimate would have the difference carried forward, but those who drive more than expected would be required to pay the difference.
Not without controversy
The scheme has not been welcomed by a lot of electric vehicle drivers, especially those incentivised to buy the vehicles due to the government’s previous road tax exemption scheme.
Meanwhile, other critics have raised concerns that the move will set a precedent whereby per-mile taxation is normalised, in which case, the scheme could, in theory, be introduced for drivers of petrol vehicles too.
A hope to stabilise public finances
It’s likely that the government will pursue the new policy in a bid to stabilise public finances after the significant financial gap that has emerged from a drop in fuel duty revenue. But in an era of high energy bills and with electric vehicles already expensive, it brings questions as to whether the move will kill enthusiasm for electric vehicles.
Speculated for years
The introduction of a pay-per-mile tax on electric vehicles has long been the subject of public debate, with the previous Conservative government ruling out the concept time and time again.
Perhaps the introduction of the tax is not as much of a surprise as many make it out to be, as the Chancellor seemingly looks to raise revenue wherever she can at a time when public finances seem more volatile than ever.
