The British Vehicle Rental and Leasing Association (BVRLA) has warned that the Government’s proposed pay-per-mile electric vehicle duty (eVED) could cost the UK fleet sector £260 million a year
The scheme was announced in the last Budget and could be introduced as early as 2028.
The BVRLA estimates that the impact will include £75 million in direct administration costs and £185 million in lost productivity, as vehicles are taken off the road for mileage checks.
While presenting evidence to the Transport Committee’s EV transition inquiry, BVRLA chief executive Toby Poston advised that the scheme as currently designed is “extremely fleet hostile” and is being introduced “in the wrong way at the wrong time”.
Highlighting the practical challenges of delivering the scheme at scale, Poston pointed out the difficulties of accurate mileage collection. There would be significant challenges in estimating, reporting, verifying and reconciling mileage across large fleets, and the significant vehicle downtime and operational disruption that annual verification processes are likely to cause.
“Based on current fleet data, eVED would have cost rental, leasing and fleet operators around £185 million in 2025 through a combination of administration and vehicle downtime. That rises to roughly a quarter of a billion pounds by 2028 as fleets grow.
“In return, the Treasury is expected to collect around £595 million in eVED from the sector.
“This is not a marginal cost. It is a significant operational burden that ultimately feeds through to businesses and consumers who rely on these vehicles every day. It is an inefficient policy that adds unnecessary friction into a sector that is already investing heavily in decarbonisation.”
In the context of its estimates, the BVRLA and its members have registered concerns that the high costs they expect from the eVED could risk sending the wrong signal to current and prospective EV drivers, particularly as it applies to vehicles already on the road.
