The Treasury is reportedly keen all drivers pay their fair share.
Rachel Reeves is set to unveil the Budget next month (Image: Getty)
Electric Vehicle (EV) drivers could face a new tax under proposals being considered by the Chancellor, reports say. Treasury officials are said to have come up with several proposals as Rachel Reeves looks to fill a black hole in public finances estimated to be as high as £50 billion by some economists.
Ms Reeves has already confirmed tax rises and spending cuts are on the cards for next month’s Budget and it appears new levies could be placed on EV drivers to raise revenue. Drafted proposals are said to include taxes on the weight of the car or a pay-per-mile system. Reports say these are being considered as drivers of EVs don’t pay fuel duty but still contribute to congestion and deterioration in road quality.
EV drivers do not pay fuel duty (Image: Getty)
According to The Sun, which broke the story, it is believed the Treasury are keen all drivers pay their fair share and no final decisions have been made.
The Express has contacted the Treasury for comment.
The Office for Budget Responsibility (OBR), which independently monitors the health of the British economy, says fuel duties are a “significant source” of Government revenue and are expected to raise £24.4 billion in 2024-26.
The duty is paid at the pump by motorists driving petrol or diesel vehicles after filling up. It also applies to other fuels used for heating. There are approximately 1.3 million EV drivers in the UK. EV drivers only started paying road tax in April — the standard rate is £195.
The Government is preparing to ban the sale of new fully petrol and diesel vehicles from the start of the next decade as part of Ed Miliband’s push for net-zero emissions.
Last month, the head of Vauxhall told the Express more action is needed for the country to be ready for Labour’s “ambitious” 2030 target.
Managing director Steve Catlin warned buyers’ concerns around public charging points could hit the plans, as new analysis by the car giant showed the pace of installation has slowed in the last 12 months.
Ms Reeves is set to unveil her budget on November 26.
The International Monetary Fund (IMF) this week warned the UK will face the highest rate of inflation in the G7 in both 2025 and 2026. It also said Britain is set to be the second-fastest growing G7 economy this year.
