Rachel Reeves sparks 'two-tier' tax row with favourable EV rates as petrol and diesel drivers pay more
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Electric vehicle owners will face a new mileage-based tax, but their annual increases will be lower than those for petrol and diesel drivers under Labour's plans, prompting claims of a "two-tier" system.At the Autumn Budget last year, Chancellor Rachel Reeves confirmed that the new Electric Vehicle Excise Duty (eVED) will come into force from April 1, 2028.
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Under the new system, fully electric and hydrogen-powered cars will pay 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile.
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Unlike fuel duty and standard Vehicle Excise Duty, which will continue to rise in line with the Retail Price Index, eVED will increase each year in line with the Consumer Prices Index.
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TRENDING Stories Videos Your Say At present, CPI stands at 2.8 per cent, compared with RPI at 3.1 per cent, prompting concerns that the gap will widen over time.Fuel duty currently costs motorists 52.95p per litre, equivalent to around 6p to 7p per mile for many drivers.
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It has been frozen since 2011 but is due to...
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