What is a ‘pay-per-mile’ system and how could it work in the UK?

An MP has criticised rumours that the government is considering introducing a pay-per-kilometre scheme to help offset the shortfall left by electric vehicle drivers not paying excise duty.

Pay-per-mile schemes work as they sound: drivers would pay tax based on how much they drove on British roads. The idea has been around for years and has been proposed as a simpler alternative to fuel duty, but it has gained popularity with the growth of electric cars.

Chancellor Rachel Reeves is reportedly considering such a plan and was recently urged to implement one by a group of transport industry bodies such ...