Road Tax in the UK: Evolving for Electric Vehicles in 2023


As we step into the year 2023, the landscape of road tax in the United Kingdom is undergoing significant changes. With the accelerated adoption of electric vehicles (EVs) and the need to address environmental concerns, the UK government is revamping the road tax system to align with the evolving transportation paradigm. In this article, we will delve into the current state of road tax in the UK and explore the transformative changes expected in 2023.

The Current Road Tax System in the UK

In the UK, road tax, officially known as Vehicle Excise Duty (VED), is a tax levied on most vehicles that are used or parked on public roads. The VED rates are primarily based on factors such as fuel type, CO2 emissions, and the vehicle's list price. This system aims to encourage environmentally friendly choices and promote the use of low-emission vehicles.

Challenges in the Current System

  1. Increasing Electric Vehicle Adoption: Over the past few years, the UK has witnessed a significant surge in electric vehicle sales. This shift towards cleaner transportation options presents a challenge to the current road tax system as EVs do not emit CO2 emissions during operation. Consequently, EV owners enjoy zero VED rates, resulting in a potential revenue shortfall for road maintenance and improvement.

  2. Declining Fuel Duty Revenue: As more drivers switch to EVs, the demand for traditional fossil fuels decreases, leading to a decline in fuel duty revenue. Fuel duty is a tax imposed on petrol and diesel fuel purchases and constitutes a significant portion of the government's transportation-related income. With the decline in fuel duty revenue, alternative funding sources are necessary to ensure sustainable road maintenance and infrastructure development.

Changes to Road Tax in the UK in 2023

To address the challenges posed by the increasing adoption of EVs and declining fuel duty revenue, the UK government has devised a new road tax system set to be implemented in 2023. Some of the key changes include:

  1. Mileage-Based Charging: The new system is expected to transition from traditional tax bands to a mileage-based charging model. Drivers will be charged based on the distance they travel, measured through various means such as GPS or mileage tracking devices. This approach ensures a fairer and more accurate reflection of road usage, regardless of the vehicle's fuel type.

  2. Smart Road Infrastructure: The implementation of smart road infrastructure will play a crucial role in the new road tax system. Intelligent sensors and technologies will enable real-time data collection, facilitating accurate mileage calculations and ensuring efficient billing processes. These advancements will also pave the way for future developments such as dynamic congestion pricing and personalized mobility solutions.

  3. Carbon-Neutral Incentives: The updated road tax system will incentivize carbon-neutral transportation choices. While EVs will continue to enjoy reduced or zero road tax rates, there will be additional benefits for drivers who choose to use renewable energy sources to charge their vehicles. This approach encourages sustainable practices and promotes the growth of a greener transport ecosystem.


In the face of the electric revolution and the changing dynamics of transportation, the UK road tax system is undergoing a significant transformation in 2023. The shift towards a mileage-based charging model, integration of smart road infrastructure, and incentives for carbon-neutral choices highlight the government's commitment to sustainable and efficient road taxation. By adapting to the evolving needs of the transport sector, the UK aims to create a fair and future-ready road tax system that supports environmental goals and ensures the continued development of its road infrastructure.