The UK government is reportedly considering introducing a pay-per-mile charge for electric vehicles (EVs) — a move that could add hundreds of pounds in annual costs for taxi and private hire drivers.
According to The Guardian, Chancellor Rachel Reeves is exploring a road usage tax that would see EV owners pay around 3p per mile. The measure could be announced in the upcoming Budget as part of a wider effort to replace falling fuel duty revenues.
Top Gear noted that the charge could be introduced from 2028, following a consultation period to decide how mileage would be tracked and verified.
A Carwow poll found that 49% of motorists consider a pay-per-mile system fairer than the current model, while others raised concerns about privacy, affordability, and the impact on people who depend on their vehicles for work.
For professional drivers, the potential costs could be significant. A private hire or taxi driver covering 30,000 miles per year could face an extra £900 in annual road charges — in addition to insurance, maintenance, and rising charging costs.
Trade bodies have warned that introducing mileage-based taxation without industry exemptions could “undermine the economic case for going electric,” especially for high-mileage users like taxi and courier drivers who were early adopters of EVs.
The Treasury has yet to confirm details of the plan, including the rate, start date, or whether commercial drivers could receive reduced rates. More information is expected following the Chancellor’s Budget statement later this month.
DM News Commentary
While a pay-per-mile charge may help balance government finances, it risks reversing progress in EV adoption within the taxi and private hire trade. Drivers who invested early in electric vehicles to cut costs and emissions may soon find themselves paying almost as much per mile as their petrol or diesel counterparts.
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