The charge is intended to ensure that drivers of electric and plug-in hybrid vehicles contribute towards motoring taxation as the use of petrol and diesel vehicles declines. HMRC has provided further details on how the new system will operate, following a consultation.

A simplified process will apply to fleets and leasing companies, recognising the way these businesses manage large numbers of vehicles. This will include allowing estimated mileage readings; introducing bulk licensing arrangements; and providing greater flexibility over payments.

There has also been a change for newer vehicles that are not currently required to have an MOT. Contrary to the original proposal, these vehicles will not be required to undergo annual mileage checks solely for the purpose of eVED.

In most circumstances where an estimated mileage figure is used, there will be no automatic refund if the vehicle subsequently travels fewer miles. Instead, a mileage credit will ordinarily be carried forward to the next licensing period. Refunds will be available in certain circumstances. Where a vehicle is sold with an eVED credit attached that has not been refunded, the credit should be taken into account when determining the vehicle's sales price.

Businesses operating vehicle fleets should consider how these changes may affect their costs and administration from April 2028.