Government to implement Electric Vehicle Excise Duty; plans to reduce administrative burden on fleets

HMRC estimates 5.6 million vehicles will fall under this new taxation in the 2028-29 financial year. Drivers will need to provide a mileage reading for their vehicle and estimate their mileage for the forthcoming tax period to calculate how much eVED to pay. The cost per mile will increase with Consumer Prices Inflation (CPI) from financial year 2029-2030 onwards.

HMRC expects eVED to raise £1.1bn for the exchequer in the first year, with revenues rising as more drivers convert to low-carbon vehicles. The Office for Budget Responsibility estimates the introduction of eVED will have a marginal (2%) impact on forecast EV sales between 2025-26 and 2030-31.

Reduced fleet burden

The Government has acknowledged that for some businesses with large fleets, the introduction of eVED will have material impacts. In response to concerns raised during the consultation, it has adjusted its original proposals to reduce some of the administrative burden and set out the following support measures for fleets:

• The Government won’t enforce additional mileage checks on vehicles under three years.
• It’ll allow fleets to submit estimated mileage for vehicles instead of actual odometer readings.
• Fleets will be able to bulk license and relicense their vehicles.
• They’ll also be able to pay the eVED in bulk.

In its consultation response, the Government has committed to include the fleet and leasing sector in ongoing workstreams. This includes looking at digital solution options to support the administration of eVED.

The eVED scheme was introduced under the Starmer Government, and the new Prime Minister, Andy Burnham, is still setting out his key policy positions. While he has broadly aligned himself with the outgoing government’s fiscal manifesto promises, there remains scope for amendments or additions to existing policies.

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