Electric Vehicle Excise Duty
The government will introduce the Electric Vehicle Excise Duty (eVED), a new mileage-based charge for electric and plug-in hybrid vehicles, effective from April 2028.
Under this scheme, drivers will be required to pay a per-mile charge in addition to the existing Vehicle Excise Duty. The charge will be 3p per mile on all mileage covered by those driving Battery Electric Vehicles, and 1.5p per mile for those driving plug-in hybrids.
A public consultation has been launched to provide further details on the operation of eVED and to invite feedback on its proposed implementation. The consultation will remain open until 18 March 2026.
Vehicle Excise Duty Expensive Car Supplement
Expensive zero-emission vehicles became liable for a surcharge on Vehicle Excise Duty (VED) from April 2025.
The annual surcharge is currently £425 and applies from years two to six after purchase, on any new vehicle originally priced above £40,000.
The government will raise the Vehicle Excise Duty Expensive Car Supplement threshold to £50,000 for zero-emission vehicles only.
This change will take effect from 1 April 2026 and will apply to zero-emission vehicles registered from 1 April 2025 onwards.
Plug-In Hybrid Electric Vehicle (PHEV) Tax Easement
The government will introduce a temporary benefit in kind tax easement for plug-in hybrid electric vehicles in the benefit in kind system to prevent their tax charge increasing significantly due to new emissions standards. This easement will be in place from 1 January 2025 to 5 April 2028.
Electric Vehicle Car Grant
The government will provide an additional £1.3 billion funding for the Electric Car Grant and extend funding to 2029-30.
