Drivers of electric vehicles (EVS) could face a new tax in next month’s budget.
With the Chancellor under pressure to find the tens of billions of pounds in extra income, the BBC understands there are “conversations” within the possibility of a new EVS levy.
A government spokesman told the BBC: “The fuel duty covers petrol and diesel, but there is no equivalent for electric vehicles.”
The Statement of Statements A Daily Telegraph Reportthat the budget will include a new pay-per-mile fee for electric vehicles.
According to the telegraph drivers could be paid 3p per mile, on top of other road taxes, which would cost more than £12 a journey from London to Edinburgh. Drivers of hybrid cars are also paid, but at a lower rate.
The paper says the idea is that owners should estimate, and pay for, their road usage for the year ahead. If, at the end of the year, they drive fewer miles they have a credit to carry over, but if they drive more they face a top-up payment.
Drivers of gasoline and diesel vehicles pay fuel duty, so the transition to electric vehicles leaves a deficit in government revenues, which are already under significant pressure.
Since April of this year, electric cars have ceased to be exempt from the car exter excise duty, due to a change made in the 2022 Budget.
“We want a fair system for all drivers while supporting the transition to electric vehicles,” a government spokesman told the BBC.
“It is right to seek a tax system that fairly funds roads, infrastructure and public services,” they added.
However, the government is still backing the switch from petrol and diesel, they said, pointing to £4bn given the costs at £3,750 per eligible car,
“We will look at additional support measures to make owning electric vehicles easier and more affordable,” they said.
There are many concerns about the emerging “Gap Gap” from more gasoline and diesel cars coming off the roads.
That puts pay-per-mile systems on the edge, but there’s pushback from some quarters.
Edmund King, President of the AA, said as the government lost fuel increases, it needed to “tread hard on the transition to evs”.
He added that car sales indicate that the government’s own emissions target will not be met this year, and that the specification of the proposal must be fair or a new tax on tires “.