Octopus to cover new pay-per-mile EV tax for leasing customers

Octopus EV has announced that it will cover the incoming 3p pay-per-mile EV tax for existing customers, meaning no additional charges for motorists who have already made the transition to electric.

The tax was announced – along with a raft of ‘mixed messages’ towards EV adoption – during the Government’s Autumn Budget. The levy is scheduled to take effect in April 2028 and is intended to replace fuel duty revenue as an increasing number of UK drivers switch to EVs. At the time of writing, electric car sales nationwide have rocketed, with EVs taking more than 50% of the new car market in November and 44.4% of the second-hand market nationwide.

Octopus EV customers who completed a vehicle order before November 28 this year will be protected from the 3p-per-mile tax from when it arrives until the end of their vehicle lease. The move means that more than 20,000 drivers are set to benefit from the Octopus EV’s decision.

“EV drivers should contribute to road upkeep, but fairly and at the right time,” said Octopus EV CEO, Gurjeet Grewal. “Until the details are finalised, we want our existing customers to know they won’t be affected. They made the switch early, and we’re rewarding that commitment by absorbing the new tax and keeping their costs steady.”

Questions regarding how the 3p per mile tax will be implemented have been raised on the back of the announcement. Octopus EV has said it will adopt a tech-led approach to keep admin to a minimum.

“Our customers shouldn’t have to wade through new forms or fiddle with extra mileage reports,” Grewal added. “If there’s admin to be done, we’ll make it as easy as possible. We’ll be contributing to the government’s consultations on their new tax rules to help ensure they’re fair and easy for drivers to navigate.”

In light of the European Union’s decision to backtrack on its decision to end the sale of petrol and diesel cars by 2035, Grewal believes the UK has the opportunity to be an example of a successful EV transition.

“The government has sent a clear signal that EVs remain a UK priority,” he commented. “Extending the Electric Car Grant and investing further in public charging will give drivers the confidence to make the switch. As momentum stalls elsewhere in Europe, the UK now has a real opportunity to lead the way on cheaper, cleaner driving.”