Rachel Reeves has been told to axe her latest controversial car tax move by motoring experts. The Chancellor has previously confirmed a new pay-per-mile charge will come into effect from 2028, with EVs taxed at 3p per mile and hybrids at 1.5p per mile. However, electric car campaigners, EVA England, have called for the new electric Vehicle Excise Duty (eVED) fee to be axed, pointing out a series of risks.
Among the biggest concerns is a fear that the new charge could “undermine confidence’ in electric vehicles, possibly putting off any potential buyers. Although an open letter published by EVA England was targeted at Transport Secretary Heidi Alexander, Reeves’ oversees UK taxes and is responsible for any tweaks to the future pay-per-mile rules. The open letter to the Government read: “Our report also raises our continued serious concerns about the proposed introduction of electric Vehicle Excise Duty and any future pay-per-mile model at such a sensitive moment in the transition.
“With only 5.5% of the total car parc electric, British consumers currently being extremely price-sensitive, and 40% still EV sceptical, now is not the right time to introduce an additional tax that many drivers see as an EV-only tax. It risks undermining confidence just when we need to focus on making sure more drivers are beginning to see EVs as a viable, practical option.”
It’s not the first time Reeves has come under pressure to change the pay-per-mile tax fee since it was announced at last year’s Autumn Budget.
The Society of Motor Manufacturers and Traders (SMMT), which oversees the UK car industry, has previously stressed that the move was not right at this stage.
They said: “We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK’s EV transition, this would be entirely the wrong measure at the wrong time.
“Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake.”
The Express has contacted the Treasury for comment.
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