Rachel Reeves to hit drivers with pay-per-mile tax in Budget

Ministers will frame the move as one of fairness, as drivers of petrol cars currently pay £600 a year on average in fuel duty.
They will also argue that it is different from traditional pay-per-mile schemes, with a fee taken each year on estimated travel and no mass electronic monitoring of movements.
But the approach opens the door for the wholesale adoption of pay-per-mile taxation for all cars, raising questions about how the scheme would be enforced.
Sir Mel Stride, the Conservative shadow chancellor, said: “If you own it, Labour will tax it. It would be wrong for Rachel Reeves to target commuters and car owners in this way just to help fill a black hole she has created in the public finances.
“With Labour’s cost of living crisis, now is not the time to hit hard-working families and businesses with another tax raid.”
How the tax will work
For years, ministers and industry experts have discussed a pay-per-mile road taxation system that could be applied to all forms of cars.
While the specifics are still discussed, The Telegraph can reveal that the scheme would be aligned to the annual payment of vehicle excise duty (VED), which affects all UK motorists. EV drivers have had to pay the charge since April.
The new element is being described as “VED+” and being framed as a way to get drivers of green cars to pay more each year.
EV drivers will be asked to estimate the number of miles they will drive in the year ahead and pay a fee, set in the current plan at 3p per mile.
If the owner does not drive that amount, some of the money carries over into the next year. If they drive more miles than estimated, they would top up their payment.
The 3p-per-mile charge means drivers face paying an extra £3 for a one-way journey between Cambridge and Oxford or £12 from London to Edinburgh.




