Proposals that could bring about a significant overhaul of road pricing in Britain have received fresh momentum. Speculation suggests a 3p per mile levy for electric vehicles from 2028 may be unveiled in the forthcoming Budget.

Reports have indicated that ministers are addressing falling revenues as the rise of EVs has led fuel duty income to plummet. Motorists travelling 8,000 miles each year could face an additional £240 annual tax bill should the 3p per mile system come into force.

EVs lost their vehicle excise duty (VED) exemption in April. Research firm Stonehaven surveyed 2,249 UK adults, revealing 71% believe EV drivers should contribute at least some tax for their motoring, with just 14% thinking they should pay nothing whatsoever.

Backing for an EV levy grows when citizens see a tangible advantage, the findings suggested.

Around 61% of those surveyed indicated they would back an EV tax dedicated to enhancing charging infrastructure, climbing to 83% if the proceeds were allocated to repairing potholes. The research also showed that 47% of respondents think EV taxes should go towards reducing public charging fees, whilst 16% oppose this.

A briefing paper issued by Stonehaven cautioned that Chancellor Rachel Reeves has a “wicked problem” as EV taxation could “chill the market” for vehicle sales, which would diminish revenues.

It urged establishing a “right to home charge”, cutting public charging expenses, and introducing lower EV tax rates for current owners. Michael Dnes, Stonehaven’s head of transport policy and a former senior official in the Department for Transport, said: “This polling shows the public are open to a fair deal on EV taxes. But making that deal fair will take some work.

“Right now, there are big differences in how easy it is to go electric, and the system favours people who own a house with a driveway.

“Others can pay 10 times as much to fill the same battery. If the Government wants to impose a new tax while raising sales, it needs new measures to grow the market. More than 10 million homes are frozen out of cheap charging – and that can be fixed.”

Motorists who drive petrol and diesel cars pay duty each time they fill up, whilst EV drivers have been exempt from such charges. The Office for Budget Responsibility states that current fuel duty stands at 52.95p per litre, paid at forecourts in addition to VAT.

A recent parliamentary written question has raised concerns about the potential introduction of pay-per-mile charging for all vehicles – not just electric ones. Conservative MP Richard Holden asked Rachel Reeves: “What assessment she has made of the potential impact pay-per-mile road pricing on (a) rural motorists, (b) low-income drivers and (c) small businesses.”

Exchequer Secretary to the Treasury, Dan Tomlinson, has responded that the system is ‘under review’, with any changes to be announced at ‘fiscal events’: “Fuel duty is projected to raise £24.4bn in 2025/26 and will remain in place. At Autumn Budget 2024, the Government announced continued support for people and businesses by extending the temporary 5p fuel duty cut and cancelling the planned increase in line with inflation for 2025/26.

“The Chancellor meets with her Ministerial colleagues on a regular basis to discuss a wide range of issues. The Government keeps the tax system under review, with changes announced at fiscal events.”

Chancellor Rachel Reeves is set to introduce a 3p per mile tax for electric vehicles (EVs) when she presents her November 26 Budget, according to the Daily Telegraph. The scheme, which is expected to be implemented in 2028 following a consultation, would cost EV drivers an average of £250 per year, the newspaper reported.

Motorist groups have voiced concerns that such a tax could deter some people from switching to electric motoring. As more drivers transition from petrol or diesel cars to EVs, the Treasury faces a decrease in revenue from fuel duty.

Fuel duty generated just under £25 billion in the 2024/25 financial year. Successive governments have found the idea of introducing per-mile charges for driving – sometimes referred to as road pricing – too politically sensitive.

Motorists who drive more will need to top up this amount, while any unused funds would roll over to the following year if they cover fewer miles. For instance, a 3p per mile fee would equate to £12 for a journey from London to Edinburgh, £5 from Cambridge to Bristol, and £2 from Liverpool to Leeds.

A Government spokesperson stated: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles.

“We want a fairer system for all drivers whilst backing the transition to electric vehicles, which is why we have invested £4 billion in support, including grants to cut upfront costs by up to £3,750 per eligible vehicle.

“Just as it is right to seek a tax system that fairly funds roads, infrastructure and public services, we will look at further support measures to make owning electric vehicles more convenient and more affordable.”

Edmund King, a president, acknowledged that the Treasury faces losing fuel duty revenue, but urged the Government to “tread carefully” to avoid slowing the transition to EVs.

He commented: “We need to see the detail of this proposal to ascertain whether these new taxes will be equitable or a poll tax on wheels.”

Steve Gooding, director of motoring research charity the RAC Foundation, warned the Treasury’s “fuel duty cash-cow” is drawing to a close. He added: “If the Chancellor is tempted to go down the route of introducing a distance charge for EV drivers but still encourage EV take-up, then she needs to look at how to cut the cost of public charging for the millions of people who don’t have the option to charge their cars at home.”

Recent polling by YouGov indicates British people broadly back the concept of pay-per-mile taxation for electric vehicles. A survey of 5,833 adults across Great Britain conducted on November 6 revealed 43% either “strongly support” or “somewhat support” the proposal, whilst 34% either “somewhat oppose” or “strongly oppose” it.

Meanwhile, 23% said they “don’t know”.

YouGov’s research also indicated older generations are more inclined to support the scheme than younger demographics.