Rachel Reeves set to hit ‘average drivers’ with | Tech News

Rachel Reeves seems to be set to verify a new £300 car tax charge for the average motorist at subsequent week’s Autumn Budget. The Chancellor is believed to be pushing forward with plans to introduce a 3p pay-per-mile charge for electric car homeowners as half of a main overhaul.

The new charges would apply to homeowners of fully-electric fashions from 2028 in a bid to substitute some of the misplaced fuel obligation income.It means highway customers can be charged for each journey they make, with estimates already suggesting a journey from London to Edinburgh might value highway customers as a lot as £12. Paul Barker, editor of Auto Express, has calculated that the “average” driver, travelling slightly below 10,000 miles per 12 months, may very well be slapped with payments of nearly £300 with business customers set to pay even more.

Paul defined: “According to the latest data from Carwow Leasey, the average annual mileage for an EV is 9,900 miles for a consumer and 11,380 miles for a business vehicle. If the Chancellor were to go ahead with the pledged 3p-per-mile tax on EVs, it would cost the average EV owner nearly £300 a year (£297) – and this is on top of the removal of other incentives, such as the EV exemption on Vehicle Excise Duty.

“For business users, the cost rises to almost £350 a year (£341.40), which, on top of the company car tax exemption rules becoming less and less attractive, just adds another deterrent for business EVs, and it is business sales that are currently driving market growth.

Reeves’ new charge has been called out by experts with industry leaders questioning the decision to disincentive EVs at this stage. The Society of Motor Manufacturers (SMMT) described the idea of a per-mile fee as “the wrong measure, at the wrong time”.

Meanwhile, AA President Edmund King also explained the Government needed to “tread carefully” over fears the new rule might “slow down the transition to EVs”.

Electric car sales are on the up compared to 2024, but petrol vehicles are still a clear leader among new and second-hand car sales. Meanwhile, firms are still struggling to meet Zero Emission Vehicle (ZEV) mandate figures, with EVs accounting for around 22% sales compared to the 28% target.

Paul added: “At a time when EV uptake is critical to meeting emissions targets, increasing the cost of ownership risks slowing the transition to electric and undermining the progress already being made.”