Chancellor Rachel Reeves has announced a Pay-Per-Mile charge for EV and PHEV drivers. While presenting the Autumn Budget 2025 in the House of Commons, she explained that all cars contribute to the wear and tear of the UK’s roads. This new policy would address this issue by charging drivers according to how much they drive.

She confirmed that EV drivers will pay 3p per mile while PHEV drivers will pay 1.5p per mile. This measure will generate significant funds for road maintenance in England.

The tax will be introduced from April 2028. It will likely bring in £1.1bn in the 2028/29 financial year, rising to £1.9bn by 2030.

For private hire drivers, the new pay-per-mile tax will bring an extra financial burden. They cover hundreds of miles every day. A simple 3p or even 1.5p charge will quickly add up for them and eat into their profits.

PCO drivers already operate on tight budgets. This new fee could lead to higher passenger fares to help them cope.

Source: https://www.electrifying.com/blog/article/pay-per-mile-ev-tax-confirmed-in-budget