The UK could be facing a new pay-per-mile car tax, potentially announced within weeks, which would significantly impact millions of drivers. The proposed system, which would likely replace the current Vehicle Excise Duty (VED), has sparked concerns and criticism from motorists and advocacy groups.
Automotive experts have criticized the government’s decision to leave car tax rates unchanged, describing it as a “considerable step backwards” in promoting electric vehicles (EVs). Key concerns raised include the inequity between VAT rates for charging at home (5%) and at public bays (20%), particularly disadvantaging drivers without access to off-street parking who face higher costs. While the government cited fiscal constraints as a reason for not equalizing VAT rates, industry leaders such as the Society of Motor Manufacturers and Traders (SMMT) and the AA are calling for a revision to encourage EV adoption and reduce disparities in charging costs.
