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Drivers of certain cars face a new pay-per-mile tax system, according to reports. Chancellor Rachel Reeves is said to be considering the radical shake-up of motoring tax, with a potential announcement at the Budget later this month. And it would mean millions of drivers being charged based on how far they travel. READ MORE: Drivers who do 10,000 miles a year 'to be hit with new £300 charge' Get all the latest motoring news sent to your inbox by signing up to our new newsletter here The new system would target owners of electric vehicles (EVs) as a way to address declining revenue from fuel duty with more Brits switching to electric by the year. The rate could reportedly be set at 3p per mile. That would work out to a £300 annual charge for someone doing 10,000 miles a year. It would leave those who do long commutes or travel long distances for other reasons facing higher charges. It's sparked claims those who have little choice to use their cars because of a lack of reliable public transport options, such as those living in rural areas, will be unfairly hit. EV drivers currently avoid having to pay fuel duty as they don't need to fill up with petrol and diesel. The push to electric and 2030 ban on new petrol and diesel models will only accelerate the switch to electric. The new rules would could potentially come into effect in 2028. Tanya Sinclair, CEO of Electric Vehicles UK, said: "The Government must take the time to consult properly, design carefully and communicate transparently, a process that will take years, not months. "Rumours about pay-per-mile only unsettle drivers and risk slowing the very market we need to grow." Mairéad Warren de Búrca, managing director in Alvarez & Marsal’s Indirect Tax, said: "A per-mile charge for EVs would mark a major shift in how the Treasury raises revenue from road users. "The Chancellor faces a clear tension: maintaining fairness as fuel-duty receipts collapse, without discouraging the switch to electric. “The measure makes fiscal sense, but as ever, timing will be everything. "If the Government wants credibility on net-zero and tax reform, it must show this is about modernising revenue, not penalising greener drivers. "The EV sector will be disappointed, with many hoping for a cut in VAT on public charging from 20% to 5% to match the rate for home charging. "The real challenge, though, is delivery - a per-mile system would likely rely on manual or self-reported data, creating an administrative headache for the Government.”
