A leaked report outlining the UK’s economic and fiscal outlook for the upcoming Budget reveals plans for a new tax on electric and hybrid vehicles. According to the document from the Office for Budget Responsibility (OBR), the proposed charge will take effect in April 2028, with electric car drivers expected to pay a road charge of 3p per mile and plug-in hybrid drivers 1.5p per mile. These rates will be adjusted annually for inflation.
The government aims to generate approximately £1.4 billion through this new tax, which is described as roughly half the fuel duty rate imposed on petrol vehicle drivers. In this context, an electric car driver traveling 8,500 miles in the 2028-29 financial year would incur a cost of around £255, which is significantly lower than the tax burden faced by petrol and diesel drivers.
In response to the leak, the OBR has issued an apology and stated that it is investigating how the document was released prematurely.
Concerns about the implications of this taxation approach have been voiced by automotive stakeholders. Edmund King, president of the AA, acknowledged that the government’s announcement presents a critical juncture for drivers, emphasizing the need for a balanced approach that facilitates investments in road infrastructure while promoting the shift toward electric vehicles to meet environmental targets. The tax’s potential impact on the transition to electric vehicles raises questions about the government’s strategy in addressing both fiscal needs and climate commitments.
Source: https://www.bbc.com/news/articles/c8jw9l7gx92o?at_medium=RSS&at_campaign=rss