The Treasury has confirmed that Rachel Reeves' new pay-per-mile car tax plan could collect mileage data from vehicles using in-built connectivity over 5G, though officials stress the technology will be optional.
New Details on Pay-Per-Mile Tax
Under the proposed electric Vehicle Excise Duty (eVED), electric cars will be charged 3p per mile from April 2028, while plug-in hybrids will pay 1.5p per mile. Motorists driving an average of 10,000 miles per year would face an additional £300 annually to use the roads.
The Treasury's latest document reveals that the system initially will rely on motorists self-reporting their mileage, with odometer readings verified at MOT tests by garages. However, officials are now exploring the use of vehicles' in-built connectivity to transmit mileage data automatically.
Optional Technology for Mileage Reporting
The Treasury report states: “The government can also confirm that we will begin developing optional additional functionality within eVED, which will allow motorists to choose to make use of their car’s in-built connectivity (i.e. the ability to send/receive information by 4G/5G). Making use of mileage data that cars already report will be optional, but those who do opt in will benefit from a quicker, easier-to-use, and more flexible system.”
The government plans to work with representative bodies, garages, manufacturers, fleet and leasing businesses, and other stakeholders. A further update on the opt-in functionality is expected by the end of the year.
Concerns Over Data Privacy and Implementation
Steve Walker, head of digital content at Auto Express, highlighted unresolved issues: “It risks breeding yet more uncertainty in an already confusing marketplace, with big questions around the implementation of the tax, collection of mileage data, how it will be levied on plug-in hybrids and whether foreign registered vehicles will escape the charge completely remaining unanswered.”
The Treasury emphasised that protecting motorists' privacy is a priority. The document notes that consultation respondents supported technology and automation to ease compliance, provided it is “secure, proportionate and addressed privacy concerns.”
Government Reassurance on Data Use
The Treasury added: “The consultation welcomed views on how various technologies could be used on an opt-in basis in future to simplify the system and reduce administrative burdens on motorists and businesses. Protecting motorists’ privacy as part of eVED is a priority for the government, so the intention is for any potential technology-based solutions considered in future to be optional.”
At this stage, the use of in-built connectivity remains optional and not mandatory. The government will continue consultations to refine the system ahead of the 2028 implementation date.
