The UK’s Office for Budget Responsibility (OBR) has confirmed that from April 2028 a new mileage-based tax will apply to electric vehicles and plug-in hybrids. The measure is expected to raise around £1.4 billion, partially offsetting the slide in fuel-duty receipts as petrol and diesel models recede. The charge is set to come in at roughly half the current fuel-duty rate paid by owners of internal-combustion cars, a signal that the Treasury is looking for balance rather than shock therapy.
In an early release a few hours before Finance Minister Rachel Reeves presents the Budget, the OBR said that by 2050 the state stands to lose about 0.6% of GDP as excise revenues decline, and the new tax would recoup roughly a quarter of that gap. Read this as a pragmatic attempt to shore up public finances while keeping the pace of electric-vehicle adoption in view.
