This week in fleet tax: EV mileage charges face pushback as costs and complexity mount

March 26, 2026

Plans to introduce a new pay-per-mile tax on electric vehicles are facing growing resistance, with industry bodies warning the current approach could add cost and complexity just as EV adoption gathers pace.

Under the proposed system, electric cars would be charged 3p per mile from 2028, with plug-in hybrids at 1.5p. On paper, it’s a shift towards taxing usage rather than ownership. In practice, it raises questions around how mileage is tracked, reported and split between business and private use.

The Association of Fleet Professionals has called for a delay until 2030, arguing the market is still stabilising and the added admin burden risks slowing adoption. Estimating mileage in advance, managing multi-driver vehicles and handling reimbursements could all add friction to day-to-day fleet operations.

Those concerns are echoed by the British Vehicle Rental and Leasing Association, which estimates the policy could cost fleets around £260 million a year by 2028, before the tax itself is even factored in. Toby Poston, Chief Executive at BVRLA, presented these stats to the Transport Committee's EV Transition Inquiry.

Taken together, the proposals highlight a growing tension. While the Treasury is looking to replace lost fuel duty, the current structure risks making EVs feel more complicated and less predictable to run – at a point where simplicity has been one of their biggest advantages.