Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what the policy justification is for applying interest to instalment payments of Electric Vehicle Excise Duty; and whether her Department considered alternative models for collecting eVED.

As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that electric vehicles (EVs) contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.

The Government considered a number of options for collecting eVED and intends to make complying with the new requirements as simple as possible for motorists. Consistent with their current VED payment choice, motorists will be able to choose between multiple payment options including online and via telephone; and will be able to either pay upfront or split into smaller payments such as via monthly Direct Debit.

The Government will carefully consider the eVED payment regime in the run-up to implementation to ensure it can function most effectively for motorists, and seeks views on eVED implementation as part of the consultation. The consultation is available at GOV.UK: www.gov.uk/government/consultations/consultation-on-the-introduction-of-electric-vehicle-excise-duty-eved.