Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate she has made of the potential impact of the (a) introduction of pay-per-mile road tax for electric vehicles and (b) changes to fuel duty freezes on small and medium-sized businesses in the logistics sector.

As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that electric vehicles (EVs) contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty. The taxation of motoring is a critical source of funding for public services and investment in infrastructure.

All UK-registered electric and plug-in hybrid cars will pay eVED. Other vehicle types such as vans, buses, coaches, motorcycles and HGVs will be out of scope of the tax upon its introduction. This is because the transition to electric for these vehicle types is less advanced than for cars at this stage.

At Budget 2025, the Government also announced continued support for people and businesses by extending the temporary 5p fuel duty cut until the end of August 2026. Rates will then gradually return to previous levels. The planned increase in line with inflation for 2026-27 will not take place, with the government increasing fuel duty rates in line with RPI from April 2027. This will save the average van driver £100 next year compared to previous plans, and the average HGV driver more than £800.