Rachel Reeves Announces New Driveway Fees for UK Homes
A new pay-per-mile tax for electric vehicle (EV) owners in the UK has been announced, adding to the challenges of rising living costs. The initiative, presented by Chancellor Rachel Reeves, will impact drivers using driveways or public charging points for their EVs, including plug-in hybrids.
Key Details of the New Driveway Fees
Starting in April 2028, EV drivers will be charged 3p for every mile driven. In contrast, plug-in hybrid drivers will be subject to a fee of 1.5p per mile.
- For an average driver covering 10,000 miles annually, the added cost would be £300.
- The average UK motorist drives approximately 8,500 miles per year.
Implications for Drivers
The introduction of these fees has raised concerns about its impact on those with long commutes or those living in rural locations. Critics argue that these drivers may face a disproportionate burden compared to others.
However, government officials point out that petrol and diesel vehicle owners already incur similar charges through fuel duties. The decline in revenue from fuel duty, attributed to the shift towards electric vehicles, is a key reason for this new tax.
Government’s Position
Treasury Minister Dan Tomlinson addressed the initiative, confirming it as part of a broader Electric Vehicle Excise Duty (eVED) plan introduced in Autumn Budget 2025. According to him:
- Drivers will pay this mileage charge in addition to their existing Vehicle Excise Duty (VED).
- eVED will be set at half the current fuel duty rate for electric vehicles and even less for plug-in hybrids.
No New Tax System Required
Officials assured that the eVED will streamline existing systems, negating the need for tracking devices in vehicles. Motorists will simply pay the new charges alongside their regular road tax.
This new tax structure aims to ensure fair contributions from all drivers while encouraging the transition to electric vehicles.
