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Motorists operating electric vehicles might face a new levy in the upcoming Budget.

With mounting pressure on the chancellor to secure tens of billions of dollars in additional income, conversations have reportedly occurred within government circles regarding the potential of implementing a new levy on EVs.

"Fuel duty covers gasoline and diesel, but there's no similar tax for electric vehicles. We aim for a fairer arrangement for all motorists," commented a government spokesperson.

These remarks come after reports that the financial plan would include a new mileage-based fee for EV drivers.

Suggested Pay-Per-Mile Fees

According to sources, electric vehicle owners could be charged 3p per mile, in addition to other road taxes, amounting to an additional £12 on a journey from the capital to Scotland's capital. Owners of hybrid vehicles would likewise be charged, but at a lower fee.

The plan suggests that owners would need to estimate and pay for their road usage for the upcoming year. Should they travel fewer kilometers than projected, they would get a credit to transfer to the next period, but if they drive more miles, they would incur a top-up charge.

Context and Government Income Shortfall

Motorists of gasoline and diesel vehicles pay petrol tax, so the transition to EVs leaves a gap in public revenues, which are already under considerable strain.

Since April of the current year, EVs are no longer exempt from road tax, due to a change made in the previous financial plan.

"We want a more equitable arrangement for every motorists whilst supporting the shift to EVs," stated a official spokesperson.

"It is right to seek a taxation framework that equitably supports highways, public works and public services," they added.

Assistance for EV Transition

Nonetheless, the authorities emphasized they were still support the transition away from petrol and diesel, pointing to £4bn in support already given, including subsidies to reduce upfront costs by up to £3,750 per eligible car.

"We plan to consider additional support measures to make purchasing electric vehicles more convenient and more cost-effective," they said.

Criticism and Concerns

Opposition finance spokesperson Mel Stride opposed the proposal to tax electric vehicle owners and stated at this time was not the moment for "another tax increase".

"It would be wrong for Rachel Reeves to target daily drivers and car owners in this manner just to address a black hole she has caused in the public finances," the Conservative MP remarked.

There has been increasing concerns about the emerging "tax gap" from more gasoline and diesel vehicles coming off the roads.

This has put pay-per-mile systems in the focus, but there has been push back from certain groups.

Industry Response

Edmund King, AA president, said that while the authorities was missing out on petrol tax income, it should "proceed with caution unless their measures slow down the shift to EVs".

He noted that car sales indicated that the government's set zero emissions target would not be met in the current year, and the detail of the plan was required "to ascertain whether these new taxes will be equitable or a flat-rate charge on wheels".