Fraud, Confusion, and the Electric Vehicle Tax That Proves Government Has Lost the Plot

Rachel Reeves announced a pay-per-mile tax on electric vehicles in her November 2025 Budget and has been warned that it will trigger a surge in mileage fraud. The 3p-per-mile charge set for 2028, will rely on MOT odometer readings, creating obvious incentives for drivers to "clock" their vehicles and underpay. Even the government admits this in consultation documents: "The introduction of eVED may increase the likelihood of motorists choosing to clock their vehicles."

The British Vehicle Rental and Leasing Association calls it "the wrong policy at the wrong time," warning it will create "massive administrative and operational headaches" whilst "eroding confidence in the fragile used EV market."

This is policy incompetence masquerading as climate leadership. We're demanding people switch to electric vehicles whilst simultaneously designing a tax system that encourages fraud, undermines the used market, and eliminates the running cost advantages that make EVs financially viable. You couldn't design a more counterproductive policy if you tried.

Mixed Messages

Consider what the government is telling consumers: Buy electric vehicles to save the planet. Except we've withdrawn purchase grants. And yes, they cost £51,000 on average, 31% more than petrol equivalents, during a cost-of-living crisis. But don't worry, you'll save money on running costs. Except we're introducing a 3p-per-mile tax that could cost you £250 annually. Oh, and this tax system is so poorly designed that we're expecting widespread fraud.

As one industry executive observed: "You can't drive the EV transition with one foot on the accelerator and the other on the brake."

Yet that's precisely what Britain is attempting. We've built an elaborate Zero Emission Vehicle mandate threatening manufacturers with £15,000 fines per petrol car beyond quota. We've pledged 81% emissions cuts by 2035. We trumpet climate leadership at COP summits. But we've provided virtually nothing to help ordinary families actually make this transition. Then we introduced a tax that will breed fraud and destroy consumer confidence.

Policy Failure

Rachel Reeves' October 2024 Budget epitomises this dysfunction. Company car tax breaks? Extended for businesses. Direct support for private buyers navigating unaffordable prices? Nothing. The plug-in car grant was withdrawn in 2022, and no replacement was offered.

Meanwhile, public charging costs 20% VAT compared to 5% for home electricity, costing EV drivers an extra £85 million annually and punishing those without driveways. Half of UK consumers cite price as their primary concern. They're right to worry.

Now add a fraud-prone mileage tax that the Office for Budget Responsibility says will cut EV sales by 440,000. The government's own impact assessment acknowledges it will breed criminal behaviour whilst eroding used market confidence. This isn't policy. It's sabotage dressed as revenue collection.

The Unspoken Financial Reality

Here's what makes this particularly galling: despite catastrophic policy, EVs still deliver substantial savings for those who understand the economics.

Drivers save between £3,383 and £7,498 over eight years compared to petrol cars. Petrol vehicles cost £10,000 more in lifetime running costs. Home charging costs 2-4p per mile versus 12-15p for petrol, so annual fuel savings alone reach approximately £965. Add 50% lower servicing costs and the advantage compounds.

The transformative story is the used market. Average used EV prices have dropped to £26,865—down from £27,864 in January 2024. Premium models have fallen £20,000-£40,000 since 2022. Second-hand EV sales grew 44% in Q3 2024. Which is the fastest of any drivetrain.

Concrete examples: Renault Zoe from £12,000. MG4 from £17,000. Tesla Model 3 under £20,000. Popular second-hand EVs save owners around £1,450 annually, even after the pay-per-mile tax.

The economics work. Government policy doesn't.

What Competent Policy Looks Like

If the government were serious rather than performative, five measures would drive genuine adoption:

• Restore direct consumer incentives. Not business tax breaks, but actual grants reducing purchase prices. Other European countries maintain these.
• Equalise VAT on charging. The 20% rate on public charging is indefensible. Reduce it to 5%, saving drivers £85 million annually.
• Abandon the fraud-prone mileage tax. Even the government admits it will breed criminal behaviour. You cannot eliminate EVs' running cost advantage. The very reason people switch despite higher prices, then wonder why adoption stalls.
• Promote the used market aggressively. Fund consumer education showing total cost comparisons. Provide battery health guarantees. Make the accessible entry point visible rather than undermining it with fraud concerns.
• Support salary sacrifice expansion. Over 5,000 companies offer schemes enabling employees to save 20-50%. Make this universal, not privileged.

How to Switch Despite Government Failure. Practical guidance the government should provide but doesn't:

• If you have a driveway, economics are compelling. 93% of EV drivers charge at home, paying under 3p per mile. Use cost calculators showing personalised savings.
• Explore the used market seriously. Modern EVs hold value effectively. Most batteries carry 8-year warranties. Quality electric vehicles now cost less than equivalent petrol cars with dramatically lower running costs.
• If employed, pressure employers about salary sacrifice. Show them the financial advantage.

Urban drivers should calculate ULEZ savings and parking exemptions, often exceeding £4,500 annually.

The mileage fraud warning isn't a bug, it's a feature

The fraud warning crystallises everything wrong with Britain's EV policy. We demand manufacturers produce vehicles consumers cannot afford, then fine them billions when sales fall short. We withdraw consumer support whilst lecturing about climate urgency. We trumpet international commitments whilst interest in purchasing EVs declines from 58% in 2021 to 50% in 2024. Now we've designed a tax so poorly conceived that government itself admits it will breed criminal behaviour.

This isn't policy failure through oversight. It's systemic dysfunction, regulatory theatre optimised for conference speeches rather than actual outcomes. We're sabotaging the very transition we claim to champion, then expressing surprise when targets collide with reality.

Britain can achieve electrification. The technology works. Infrastructure expands. Economics increasingly favour EVs, particularly on the used market. But not through policies that punish everyone: manufacturers for serving consumer needs, buyers for lacking £51,000, and now law-abiding EV owners who'll compete with fraudsters gaming a broken tax system.

The mileage fraud warning isn't a bug. It's a feature and the inevitable consequence of demanding transformation whilst refusing to enable it; of climate ambition divorced from economic and administrative reality, and of a government which prioritises appearance over outcomes.

Families can still switch and save thousands. But they'll do so despite government policy, not because of it. That's not leadership. That's abdication with a fraud warning attached.

Rachel Reeves announced a pay-per-mile tax on electric vehicles in her November 2025 Budget and has been warned that it will trigger a surge in mileage fraud. The 3p-per-mile charge set for 2028, will rely on MOT odometer readings, creating obvious incentives for drivers to "clock" their vehicles and underpay. Even the government admits this in consultation documents: "The introduction of eVED may increase the likelihood of motorists choosing to clock their vehicles."

The British Vehicle Rental and Leasing Association calls it "the wrong policy at the wrong time," warning it will create "massive administrative and operational headaches" whilst "eroding confidence in the fragile used EV market."

This is policy incompetence masquerading as climate leadership. We're demanding people switch to electric vehicles whilst simultaneously designing a tax system that encourages fraud, undermines the used market, and eliminates the running cost advantages that make EVs financially viable. You couldn't design a more counterproductive policy if you tried.

Mixed Messages

Consider what the government is telling consumers: Buy electric vehicles to save the planet. Except we've withdrawn purchase grants. And yes, they cost £51,000 on average, 31% more than petrol equivalents, during a cost-of-living crisis. But don't worry, you'll save money on running costs. Except we're introducing a 3p-per-mile tax that could cost you £250 annually. Oh, and this tax system is so poorly designed that we're expecting widespread fraud.

As one industry executive observed: "You can't drive the EV transition with one foot on the accelerator and the other on the brake."

Yet that's precisely what Britain is attempting. We've built an elaborate Zero Emission Vehicle mandate threatening manufacturers with £15,000 fines per petrol car beyond quota. We've pledged 81% emissions cuts by 2035. We trumpet climate leadership at COP summits. But we've provided virtually nothing to help ordinary families actually make this transition. Then we introduced a tax that will breed fraud and destroy consumer confidence.

Policy Failure

Rachel Reeves' October 2024 Budget epitomises this dysfunction. Company car tax breaks? Extended for businesses. Direct support for private buyers navigating unaffordable prices? Nothing. The plug-in car grant was withdrawn in 2022, and no replacement was offered.

Meanwhile, public charging costs 20% VAT compared to 5% for home electricity, costing EV drivers an extra £85 million annually and punishing those without driveways. Half of UK consumers cite price as their primary concern. They're right to worry.

Now add a fraud-prone mileage tax that the Office for Budget Responsibility says will cut EV sales by 440,000. The government's own impact assessment acknowledges it will breed criminal behaviour whilst eroding used market confidence. This isn't policy. It's sabotage dressed as revenue collection.

The Unspoken Financial Reality

Here's what makes this particularly galling: despite catastrophic policy, EVs still deliver substantial savings for those who understand the economics.

Drivers save between £3,383 and £7,498 over eight years compared to petrol cars. Petrol vehicles cost £10,000 more in lifetime running costs. Home charging costs 2-4p per mile versus 12-15p for petrol, so annual fuel savings alone reach approximately £965. Add 50% lower servicing costs and the advantage compounds.

The transformative story is the used market. Average used EV prices have dropped to £26,865—down from £27,864 in January 2024. Premium models have fallen £20,000-£40,000 since 2022. Second-hand EV sales grew 44% in Q3 2024. Which is the fastest of any drivetrain.

Concrete examples: Renault Zoe from £12,000. MG4 from £17,000. Tesla Model 3 under £20,000. Popular second-hand EVs save owners around £1,450 annually, even after the pay-per-mile tax.

The economics work. Government policy doesn't.

What Competent Policy Looks Like

If the government were serious rather than performative, five measures would drive genuine adoption:

• Restore direct consumer incentives. Not business tax breaks, but actual grants reducing purchase prices. Other European countries maintain these.
• Equalise VAT on charging. The 20% rate on public charging is indefensible. Reduce it to 5%, saving drivers £85 million annually.
• Abandon the fraud-prone mileage tax. Even the government admits it will breed criminal behaviour. You cannot eliminate EVs' running cost advantage. The very reason people switch despite higher prices, then wonder why adoption stalls.
• Promote the used market aggressively. Fund consumer education showing total cost comparisons. Provide battery health guarantees. Make the accessible entry point visible rather than undermining it with fraud concerns.
• Support salary sacrifice expansion. Over 5,000 companies offer schemes enabling employees to save 20-50%. Make this universal, not privileged.

How to Switch Despite Government Failure. Practical guidance the government should provide but doesn't:

• If you have a driveway, economics are compelling. 93% of EV drivers charge at home, paying under 3p per mile. Use cost calculators showing personalised savings.
• Explore the used market seriously. Modern EVs hold value effectively. Most batteries carry 8-year warranties. Quality electric vehicles now cost less than equivalent petrol cars with dramatically lower running costs.
• If employed, pressure employers about salary sacrifice. Show them the financial advantage.

Urban drivers should calculate ULEZ savings and parking exemptions, often exceeding £4,500 annually.

The mileage fraud warning isn't a bug, it's a feature

The fraud warning crystallises everything wrong with Britain's EV policy. We demand manufacturers produce vehicles consumers cannot afford, then fine them billions when sales fall short. We withdraw consumer support whilst lecturing about climate urgency. We trumpet international commitments whilst interest in purchasing EVs declines from 58% in 2021 to 50% in 2024. Now we've designed a tax so poorly conceived that government itself admits it will breed criminal behaviour.

This isn't policy failure through oversight. It's systemic dysfunction, regulatory theatre optimised for conference speeches rather than actual outcomes. We're sabotaging the very transition we claim to champion, then expressing surprise when targets collide with reality.

Britain can achieve electrification. The technology works. Infrastructure expands. Economics increasingly favour EVs, particularly on the used market. But not through policies that punish everyone: manufacturers for serving consumer needs, buyers for lacking £51,000, and now law-abiding EV owners who'll compete with fraudsters gaming a broken tax system.

The mileage fraud warning isn't a bug. It's a feature and the inevitable consequence of demanding transformation whilst refusing to enable it; of climate ambition divorced from economic and administrative reality, and of a government which prioritises appearance over outcomes.

Families can still switch and save thousands. But they'll do so despite government policy, not because of it. That's not leadership. That's abdication with a fraud warning attached.

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