Payments can be made monthly, half-yearly or annually, and 80 per cent of the revenue from the tax during the first three years will be invested in infrastructure and support measures for electric vehicles.
The decision to go ahead with the new tax, originally announced in the 2025 Budget, was announced following a lengthy consultation on the matter, which led to some changes compared with the Government’s initial proposals. For example, there will be no compulsory inspections for cars less than three years old that are not required to obtain an annual roadworthiness certificate. Following criticism from the sector, procedures have also been simplified for leasing companies and company cars, with the granting of block licences and mileage checks carried out during the annual roadworthiness test.
If the relevant authorities suspect that the odometer has been tampered with or that other types of fraud have taken place, they may carry out ad hoc inspections and impose fines.
The Government is also looking into the possibility of automatically monitoring the mileage of each car via an integrated 4G or 5G connectivity system, but has emphasised that tracking vehicles’ locations via GPS will not be permitted in order to protect privacy, and that the system will, in any case, be on a voluntary basis.
“The Government has listened to us by scrapping the mandatory inspections for cars less than three years old, which would have been a heavy burden on new motorists and company fleets,” commented Tanya Sinclair, chief executive of Electric Vehicles UK. “However, the Government must now communicate its intentions more clearly to motorists, because we still have a mix of incentives, taxes, subsidies and measures that do not reflect a clear vision of an all-electric future.”
