Pay-per-mile EV tax: automatic eVED refunds will not arrive until 2030

Electric car drivers will pay the pay-per-mile road tax from April 2028, but they will have to wait until 2030 for automatic refunds of miles they paid for and did not drive. The Autumn Budget on 28 October 2026 confirmed that the Electric Vehicle Excise Duty, or eVED, starts on 1 April 2028 at 3p a mile, according to GOV.UK. The Budget documents add a mileage estimation tool at launch and an opt-in connected-car service, and say an automated refunds model will be developed by 2030, as EV Fleet World reported.

For a UK driver, that means guessing your mileage carefully matters. Under the rules published in July 2026, overpaid miles are ordinarily carried forward as credit rather than paid back, and prepaid miles stay with the car when you sell it. Below we put numbers on what that costs.

What did the Budget say about eVED?

The government is pressing ahead with eVED from April 2028 despite warnings from the fleet and motor industry, EV Fleet World reports. The Treasury’s updated policy paper, dated 28 October 2026, confirms the main terms:

eVED detail	What has been confirmed
Start date	1 April 2028, paid when you first renew road tax after that date
Battery electric and hydrogen cars	3p a mile
Plug-in hybrids	1.5p a mile
Inflation	Uprated with CPI from 2029 to 2030 onwards
Vehicles affected	About 5.6 million in 2028 to 2029
Mileage estimation tool	Available at launch
eVED Connect	Opt-in, uses the car’s built-in connectivity
Automated refunds	Model to be developed by 2030
Legislation	Finance Bill 2026 to 2027

The rates, start date and uprating come from GOV.UK. The estimation tool, eVED Connect and the 2030 refunds date come from the Budget “red book”, as reported by EV Fleet World, the RAC and Electrifying. The Finance Bill 2026 to 2027 route is reported by TaxiPoint; the policy paper itself says only that primary legislation will amend the 1994 Vehicle Excise and Registration Act. We have not been able to read the red book’s eVED section directly, so we attribute those details to the outlets that did.

The Office for Budget Responsibility expects eVED to raise £1,115m in 2028 to 2029, rising to £1,885m in 2030 to 2031, according to the policy paper. It also estimates that eVED and related measures will reduce electric car sales by around 120,000 over the forecast period, about 2% of expected EV sales.

How will refunds work before 2030?

This is the part that matters most for your wallet. The government’s July 2026 consultation response set out the rules, and says plainly: “The new eVED system will not support automatic refunds at launch.”

Instead, the response says:

• Unused miles become credit. “Where motorists drive fewer miles than estimated, any resulting mileage credit will ordinarily be carried forward” and set against your next bill.
• Shortfalls are paid at renewal. If you drive more than you paid for, you make a balancing payment “at the prevailing rate at the time”. You can also top up during the year.
• Hardship refunds exist, with conditions. You can self-certify through a short DVLA online form if the refund is over £100, your financial circumstances have changed unexpectedly and you would face hardship. No evidence is required.
• Stolen or written-off cars get a pro-rata refund.

The Budget’s promise is that by 2030 refunds will be easier and available in more cases, including overestimated mileage and selling a car. Auto Express notes it is still unclear exactly how overpayments will be handled in the meantime. On the current published rules, the honest answer is: as credit, not cash.

How much will eVED cost at 3p a mile?

Here is the basic bill for battery electric cars at the 2028 rate, before any inflation uprating. Plug-in hybrids pay half.

Annual mileage	eVED at 3p (electric)	eVED at 1.5p (plug-in hybrid)	Monthly, electric, before Direct Debit surcharge
5,000 miles	£150	£75	£12.50
7,500 miles	£225	£112.50	£18.75
10,000 miles	£300	£150	£25.00
12,000 miles	£360	£180	£30.00

The government says eVED can be paid monthly, every six months or annually. Its own example is £12.50 a month for 5,000 miles, or £13.12 with a 5% Direct Debit surcharge. On the same basis, 10,000 miles works out at about £26.25 a month. These sums are on top of normal Vehicle Excise Duty, which our guide to road tax on electric cars explains.

What if I overestimate my mileage?

Our worked example uses only the 3p rate and round numbers.

Say you expect to drive 10,000 miles and pay £300, but you actually drive 8,000. You have overpaid by 2,000 miles, or £60. Under the July 2026 rules, that £60 would ordinarily be carried forward as credit against next year’s eVED, not paid back. It is also below the £100 threshold for a hardship refund, so that route would not apply.

For most drivers who keep their car, carrying credit forward costs little: it simply reduces next year’s bill. The main cost is having the money tied up for a year. Where a refund is paid, the consultation response says it is given at “the rate applicable when the mileage was purchased”.

Underestimating has the opposite risk. If you pay for 7,500 miles (£225) and drive 10,000, you owe 2,500 miles at the next renewal: £75 at 3p, though the balancing payment is charged at whatever the rate is then.

What happens if I sell my EV part way through the year?

This is where the wait until 2030 bites. The July 2026 response says: “Where there is a pre-paid mileage credit, this will transfer with the vehicle”, and the government “expects the value of the credit to be reflected in the sale price.”

Here is our worked example. You pay £300 up front for 10,000 miles in April, then sell the car in October after 4,000 miles.

Step	Miles	Value at 3p
Miles paid for	10,000	£300
Miles driven before sale	4,000	£120
Credit left on the car	6,000	£180

Until the automated model arrives, that £180 goes with the car. You only get it back if the buyer or dealer pays for it in the price. A private buyer may accept that; a dealer offering a trade-in price may not itemise it at all. Buyers should be able to see paid mileage on the DVLA’s vehicle enquiry screen, according to the consultation response, which gives sellers something to point to.

If you are short instead, for example you paid for 7,500 miles and have driven 9,000 by the sale date, the response says you can settle the outgoing liability with a top-up before the transfer. That would be 1,500 miles, or £45.

Paying monthly limits how much credit you can build up in the first place. We could not confirm how instalments are settled when a car changes hands, so check that with the DVLA once its guidance is published.

What is eVED Connect, and is it automatic tracking?

eVED Connect is an opt-in service that will use a car’s built-in connectivity to supply mileage, so you do not have to type in odometer readings, according to EV Fleet World. It could also help with estimating mileage for the year ahead. The RAC says it is still in development and has no confirmed launch date.

Some headlines have described this as automatic tracking. That overstates it: it is optional. The July 2026 response said “making use of mileage data that cars already report will be optional”, and that any future technology-based solutions are intended to be optional too. If you do not opt in, you give an odometer reading and an estimate when you renew, and the DVLA checks it against MOT records. Our report on eVED enforcement powers covers how mileage will be policed.

How has the industry reacted?

Fleet and motor trade groups welcomed the practical changes but not the tax. “Making a bad tax easier to administer doesn’t make it a good tax,” said Toby Poston, chief executive of the BVRLA, according to EV Fleet World. “eVED remains the wrong tax at the wrong time.”

Samantha Roff of Venson Automotive Solutions said a “flat pay-per-mile charge hits hardest the business drivers”, and noted there is still no confirmed date for fleet guidance. Paul Hollick, chief executive of Lightfoot, called the optional connectivity system “particularly encouraging” but said fleets need clarity on who reports mileage for leased and company cars. Sue Robinson of the NFDA called the Budget “a missed opportunity” and proposed a fixed annual charge instead.

What should EV drivers do now?

Nothing changes until April 2028, but a few habits will help:

• Estimate honestly, not generously. Use your MOT history, which shows past mileage on GOV.UK, and the estimation tool when it launches. Overestimating ties up money; underestimating means a bill later.
• Consider paying monthly. It costs 5% more by Direct Debit, but leaves less prepaid credit stranded if your plans change.
• Plan a sale around renewal. If you expect to sell in 2028 or 2029, a smaller estimate with top-ups keeps credit low. When selling, show the buyer the paid mileage.
• Check finance deals. If your lease or PCP runs past April 2028, ask who pays eVED and who reports mileage.

Our explainer on what eVED will cost you and our earlier piece on whether EV owners will pay per mile give the wider background, and our Budget preview set out what drivers had asked for.

Our view

The estimation tool and an optional connected-car route are sensible steps that should make eVED easier to get right. But launching a tax in 2028 that cannot automatically pay back overpayments until 2030 puts the risk on drivers. For most people the sums are modest, tens of pounds of credit carried into next year. The real gap is for anyone who sells a car mid-year, who will have to rely on the buyer valuing credit they cannot see on the windscreen. Until the 2030 model arrives, estimate carefully, consider paying monthly, and keep your mileage records.