Plug-in hybrid cars (PHEV) will become liable for Rachel Reeves’s new electric road tax from 2028, with each mile driven attracting a 1.5p fee. It will be half the 3p levy paid by owners of electric vehicles (EVs).
Last year, justifying the policy, the Treasury said PHEV motorists drove “more or less than 50% in electric mode”. But analysis quietly published by the Department for Transport last week revealed that the Government had overestimated the number of miles plug-in hybrid owners covered with battery power.
“Evidence indicates that PHEVs complete a smaller proportion of their journeys in electric mode than previously assumed,” the document on fuel efficiency read.
Critics said the decision to tax PHEV drivers pay-per-mile and fuel duty felt like “double taxation”.
Despite this, the Government will press ahead with the tax in two years’ time. Known as electric vehicle excise duty (eVED), the tax is being introduced to offset some of the money lost from dwindling fuel duty receipts.
The Office for Budget Responsibility (OBR) estimates pay-per-mile will bring in £7 billion for the Treasury come 2050. That is far below the £24 billion currently raised each year from fuel duty....<<<Read More>>>>...