UK motorists back the Chancellor’s call for extra tax contributions from EV drivers with a mileage-based road charge
As the government prepares for next week’s Budget and the spotlight intensifies on a potential “pay-as-you-go” road tax for electric-vehicle (EV) drivers, Venson Automotive Solutions suggests that public opinion is firmly in favour of EV owners “paying their share”.
A recent survey of private and business drivers by Venson[i] found that 40% believe a road-pricing scheme charging by miles driven – either based on MOT records, telematics data or business mileage expense claims – could help plug the significant tax-revenue shortfall arising as fuel duty revenues collapse.
As the UK’s EV fleet grows, Rachel Reeves is reported to be considering introducing a mileage-based tax for EVs in the not-so-distant future. One widely reported scenario proposes a charge of 3p per mile for EVs from 2028, adding perhaps £240-£300 per annum to the average driver’s bill, on top of the £195 annual road tax already applied to many EV owners[ii].
Simon Staton, Client Management Director at Venson Automotive Solutions, said: “Drivers are increasingly aligned on the view that EV owners should make a fair tax contribution towards the roads, just as petrol and diesel motorists do.
“That said, this shift in public sentiment doesn’t ease the pressure on businesses now facing around £620 a year in extra tax for many electric fleet vehicles. Fleets have played a major role in accelerating EV uptake, but the growing financial impact could cause organisations to revisit whole-life costs and reconsider how they shape their fleet strategies in the months ahead.”
Whilst EV owners will be bracing themselves for the introduction of a mileage-based tax after the Budget, they will no doubt want clarification on how the government will address fairness issues, such as rural vs urban drivers, and those driving for business. Meanwhile, businesses operating fleets will be anticipating rising operating costs, which could well impact EV adoption and lease renewal decisions.
Concludes Simon Staton, “If ministers want the EV market to keep accelerating, they’ll need to give fleets the support they deserve. Hints that the Expensive Car Supplement threshold might be raised in an upcoming fiscal statement are reassuring, as it would ease some of the current cost pressures. Until decisions are confirmed, however, many businesses may take a step back and reassess further EV investment.”