Motorists could soon be hit with new 9p pay-per-mile car tax charges as the Treasury issued a major statement ahead of Rachel Reeves’ November Budget. In a statement to the Daily Express, Treasury bosses failed to categorically rule out the introduction of pay-per-mile fees later this year.
This is in stark contrast to last Autumn, where DfT bosses told the Daily Express there were “no plans” for a road pricing scheme ahead of the Budget. Earlier this month, the Resolution Foundation called for the introduction of a new weight-based tax system tied closely with distance. The Resolution Foundation’s ‘Call of Duties’ plan suggested medium-sized electric vehicles could be charged up to 6p per mile to use the roads.
However, weight-based fees would mean lighter EVs under 1,00kg would be charged 3p per mile with heavier models weighing over 2,800kg paying 9p per mile.
When questioned over whether the Government was considering a 9p per mile car tax charge, the Treasury simply said: “Our balanced approach helps to protect public finances during the transition to electric vehicles.
“We have introduced Vehicle Excise Duty (VED) on Electric Vehicles while providing £1.4bn to boost sales and £650m in grants to cut upfront costs by up to £3,750 per vehicle.”
The Treasury told the Daily Express that the Chancellor keeps all taxes under review and makes tax decisions at fiscal events. The Treasury also added they do not specifically comment on speculation about tax changes.
Last September, the Department of Transport made it clear that a pay-per-mile fee was not on the agenda. They said: “We have no plans to introduce road pricing.
“We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
Weeks later, Rachel Reeves didn’t announce any pay-per-mile fees but did confirm an overhaul on VED rates for petrol, diesel and electric vehicles. The Treasury did confirm that the Government is investing over £4.5bn to support both industry and consumer switch to electric vehicles.
This includes support for charging infrastructure, supply chains and finance through the Electric Car Grant. One in four new cars sold in June was electric while the the UK led Europe in EV sales in the first quarter of 2025.
