Half of UK motorists back ‘pay-per-mile’ as a fairer road tax system – but many fear higher costs

Nearly half of UK drivers (49%) believe that a pay-per-mile road tax system would be a fairer way to charge motorists according to new research.

The research also found that fairness is top of mind for most motorists, with more than half (51%) believing all motorists should pay the same rate per mile regardless of fuel type.

The findings from Carwow, the online car-changing platform, suggest growing openness to reforming how Britain taxes driving, as policymakers consider how to replace falling fuel duty revenues in the shift towards electric vehicles (EVs).

If pay-per-mile were introduced to replace VED, many drivers say they would change their habits. Almost a third (31%) would drive less to control their spending, 18% would consider switching to a more efficient or electric car, and 14% say the change could make driving unaffordable for them entirely.

Views also differ on how such a scheme should be structured. Just over half (51%) think all motorists should pay the same rate per mile, regardless of fuel type, while 28% believe electric-vehicle drivers should pay less to reflect their lower emissions.

On Carwow, customer enquiries for battery electric vehicles grew significantly by 39% year-on-year, in October, while hybrids rose by 26%. The debate is gathering pace as the UK’s switch to electric takes more money away from fuel duty revenues. The Office for Budget Responsibility forecasts that fuel duty receipts will fall by a fifth by the end of the decade, from £28 billion to £22.6 billion.

Iain Reid, Head of Editorial at Carwow said: “These findings show motorists recognise the need for a fairer, more sustainable system as fuel duty revenues decline, but they also highlight deep concern about affordability. A move towards pay-per-mile taxation made by the Chancellor will need to balance fairness, simplicity and cost – to avoid penalising those who rely most on their cars. That said, a 3p per mile rate (as rumoured) for EVs would still be significantly less than ICE car drivers are paying in duty on fuel.

“As it always is, the devil will be in the details; how will it actually be implemented? Before EVs, we effectively had a pay-per-mile system through fuel duty: the more you drove, the more tax you paid. Now, it’s trickier.

“To ensure confidence and protect privacy, any new system should make smart use of technology – for example secure, app-based mileage reporting that’s simple for drivers and transparent about how data is used. With the right tech in place, pay-per-mile could be automated and accurate without relying on intrusive location tracking or cumbersome manual readings.”