eVED plans create a ‘tale of two tax bills’ as rural drivers penalised most

Plans to tax EV drivers for each mile they drive will create a two-tier system that punishes those in remote areas most, a new study has warned.

Individual drivers in rural areas will pay up to £260 per year in additional tax under the eVED (Electric Vehicle Excise Duty) – more than three times what those in some urban areas will pay.

The head of the UK’s leading EV lobby group called the findings “damning” while one of the bodies behind the report called for the pay-per-mile scheme to be scrapped in light of its evidence.

Double blow

The analysis by the British Vehicle Rental and Leasing Association (BVRLA) and New Automotive shows that the pay-per-mile cost delivers a double blow to drivers in rural areas. As well being worst hit by the tax bill, they are also worst served by public transport and charging infrastructure.

The bodies said the proposed 3p-per-mile tax on EVs and 1.5p-per-mile on plug-in hybrids was “structurally weighted” against drivers who are least able to reduce their mileage and least likely to have access to the public transport, charging infrastructure, or household income that would make EV ownership straightforward.

The BVRLA pointed out that drivers in rural areas have no choice but to travel further for even basic services, exposing them to higher tax bills. Meanwhile, those least exposed to the eVED thanks to lower annual mileage also enjoy far better public transport and charging infrastructure.

It has now called for the eVED plans to be scrapped.

eVED postcode penalty

The study used complex analysis of MOT records, vehicle registration figures and data on the rate of EV adoption in parliamentary constituencies to forecast regional and individual costs.

It found that on a constituency basis, Brent East in London would deliver the highest tax take, at £7.6 million per year due to the density of EV ownership.

However, it also exposed that per-driver costs would be highest in Caithness, Sutherland and Easter Ross and South West Norfolk. There individual motorists face annual costs of £247 to £260 each on top of the existing £200-per-year standard VED.

At the opposite end of the scale, individual drivers in the Cities of Westminster and London, where mileages are lowest, will pay just an additional £79 per year.

‘For millions the car is not a lifestyle choice’

Toby Poston, chief executive of the BVRLA, said: “A flat pay-per-mile charge might look fair on paper, but its burden falls hardest on the drivers least able to avoid it.

“People who live in less connected areas don’t drive more because they want to: they drive more because they have no choice. Their towns don’t have the luxury of the network of trains, tubes and cycle lanes that make car-free living possible in cities.

“Under these proposals, a driver in Caithness or rural Norfolk will pay three times the annual road tax of someone in central London. Not because of how much they earn, or how much they pollute, but simply because of where they live. That is not a fair system. Any future eVED framework must account for the reality that for millions of people across this country, the car is not a lifestyle choice. It is the only option.”

Tanya Sinclair, CEO, Electric Vehicles UK, said the government’s current approach to EVs appeared incoherent.

She commented: “The geography of this data is damning. Rural drivers, fewer chargers, longer journeys, highest bills. That is the opposite of a fair transition.

“And this week the government quietly confirmed it won’t raise fuel duty either. So petrol gets cheaper in real terms while EV drivers are punished. If there is a coherent strategy here, it is not visible from the outside.”

The EV pay-per-mile tax was announced by Chancellor Rachel Reeves in last year’s Budget as a means to plug the decline in fuel duty income caused by wider EV adoption. It is due to come into effect from 2028. However, no details of how it will be implemented or policed have been confirmed, nor has there been any indication that its impact on rural communities is being considered.