A new report has revealed that the pay-per-mile tax on electric cars will create a postcode penalty, hammering drivers in rural and poorer areas. The report, conducted by the British Vehicle Rental and Leasing Association (BVRLA), found that drivers in Scotland will feel the pinch in particular, with some areas facing annual eVED costs of up to £267. The policy is designed to plug a growing hole in Treasury finances, but the report warns that the burden will weigh heaviest on those least able to absorb it. EV drivers in areas with poor public transport - often with lower incomes - will face the steepest bills, with some paying up to £267 on top of the £200-a-year standard VED rate. The report also found that motorists living in poorer rural constituencies will feel the eVED squeeze most, due to fewer public transport options and higher annual mileage. The BVRLA said the findings from its analysis expose an 'EV postcode penalty'.
The Chancellor's pay-per-mile tax on electric cars will create a stark postcode penalty , hammering drivers in rural and poorer areas, it has been revealed. From April 2028, Rachel Reeves plans to charge electric vehicle (EV) owners 3p for every mile driven.
Plug-in hybrids (PHEVs) - capable of up to 70 miles on electric power - will face a 1.5p-per-mile levy on top of fuel duty under her electric vehicle excise duty (eVED) raid. The policy is designed to plug a growing hole in Treasury finances as fuel duty receipts fall alongside petrol and diesel sales.
The Office for Budget Responsibility (OBR) puts that shortfall at around £1billion a year - a gap Reeves now intends to close by taxing EV use for the first time. Analysis by the British Vehicle Rental and Leasing Association (BVRLA) warns the burden of her tax sting will weigh heaviest on those least able to absorb it.
EV drivers in areas with poor public transport - often with lower incomes - will face the steepest bills, with some paying up to £267 on top of the £200-a-year standard VED rate, it said. With higher insurance premiums and rising charging costs already biting, the added levy risks piling further pressure on households switching to electric.
BVRLA chief executive Toby Poston said the policy 'may appear fair on paper' - but in reality 'falls hardest on the drivers least able to avoid it'. To calculate the eVED cost for each area, the BVRLA examined average annual mileage using MOT data for every parliamentary constituency. It then collected EV and PHEV ownership data for those constituencies and estimated how many more electrified cars will be on the road by 1 April 2028 using the current adoption rate.
A total eVED cost per constituency was then divided by the number of drivers it will impact, generating an average pay-per-mile cost for both EV and PHEV owners in all 632 locations. On average, EV drivers can expect an annual pay-per-mile charge of £218, while PHEV owners will need to fork out an average of £109 a year, the study says.
To understand which parts of the country will be hit hardest, the latest child poverty statistics for each constituency were extrapolated - sourced from the House of Commons Library - to generate a deprivation rating (with the lower the rating being the worst) for each. And the data shows that motorists living in poorer rural constituencies will feel the eVED squeeze most.
This is not simply because household incomes are generally lower but due to fewer public transport options than in urban areas, which means annual mileage is typically much higher. BVRLA chief executive Toby Poston said a pay-per-mile tax on EV owners may appear fair 'on paper' - but in reality 'falls hardest on the drivers least able to avoid it'.
The parts of the UK where eVED will sting most Drivers in Scotland will feel the pinch in particular, the report finds. Some 18 of the 50 highest-mileage constituencies are north of the border, with Stirling and Strathallan (6,827 miles), Dumfriesshire, Clydesdale and Tweeddale (6,823 miles), and Caithness, Sutherland and Easter Ross (6,711 miles) topping the table. This means annual eVED costs of between £201 and £205 for EV drivers, and just over £100 for PHEV owners.
In contrast, London's ten least-affected constituencies all have median mileages below 4,000 miles per year (£120 for EV eVED), as a result of greater access to public transport, cycling infrastructure and lower car dependency. Some drivers in parts of England will also be stung by significant additional annual tax bills.
Motorists in Hayes & Harlington, Ely & East Cambridgeshire, Doncaster East and South West Norfolk also face some of the highest costs, all coming in at more than £250 a year. And some of the most deprived constituencies in the country will see EV drivers hit with eVED charges above £200. This includes Birmingham Ladywood, which has the highest child poverty rate of all 632 constituencies at 53.8 per cent.
The cost of running an EV will also increase by more than £200 for drivers in Bradford West, which ranks third overall for child poverty rates across England, Scotland and Wales. In stark comparison, drivers in the Cities of London & Westminster - one of the most affluent parts of the country - are looking at eVED levies of just £116 per year. The BVRLA said the findings from its analysis expose an 'EV postcode penalty'.
It added: 'A system structurally weighted against drivers least able to reduce their mileage and least likely to have access to public transport, charging infrastructure or the household income that would make EV ownership straightforward',
Pay-Per-Mile Tax Electric Cars Postcode Penalty Rural Drivers Poorer Drivers EV Ownership Public Transport Charging Infrastructure Household Income
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
SNAP summer EBT payments: 9 states to pay in JuneSUN Bucks provides eligible families with $120 per school-age child to help cover grocery costs during the summer months.
Read more »
See how your pay compares to the CEOs of the top US companiesNew data shows that compensation for the top jobs rose 5.9% in 2025.
Read more »
A new specialty license plate will help pay off school lunch debt across UtahA new Utah license plate could soon help feed students across the state. The Utah Lunch Debt Relief Foundation is working with the DMV to launch a specialty plate by July 1.
Read more »
Median pay for CEOs rose nearly 6% in 2025, but some compensation packages were eye-poppingThe typical CEO compensation package rose nearly 6% in 2025 to $17.7 million, as company boards rewarded their top executives for bigger profits and higher stock prices, and gave them incentives to stick around and make even more money for shareholders in the years ahead.
Read more »