Electric vehicles have been exempt from road tax for quite a few years now but changes being introduced on the 1st of April mean owners will now pay in the same way as petrol/diesel cars.
Road or car tax – officially known as Vehicle Excise Duty (VED) – is an annual fee that all cars that are used or parked on British roads have to pay.
The tax generates money that contributes to the maintenance and improvement of the nation’s roads and is based on the emissions of each car. Historically, the more polluting a vehicle, the higher the annual tax rate.
But now with zero-emission vehicle sales soaring, the government has decided it’s time to adjust the vehicle excise duty rules to boost the money coming into the Treasury with electric vehicles moving to the standard tax rate.
So, what does it mean for electric car owners of both older EVs and new electric vehicles? Let’s explore this year's car tax changes in more detail…
From the 1st of April, owners of electric vehicles will have to pay vehicle tax for the first time – with the £0 tax band being removed completely. Plus, EVs costing over £40,000 will now be subject to the extra Expensive Car Supplement.
New electric vehicles registered after the 1st of April will pay the lowest first-year rate of vehicle tax at £10.00. In year 2, they’ll pay the standard £195.00.
For any existing electric car registered between 1 April 2017 and 31 March 2025, drivers will move to the standard tax rate – which comes out to £195.00 (per year).
Any older electric vehicles registered before the 1st of April 2017 will move to the £20.00 a year vehicle (excise duty tax band).
The car tax changes also impact plug-in hybrid electric vehicles (PHEVs), which will no longer have reduced vehicle excise duty rates compared to petrol or diesel vehicles.
Do electric car owners pay the luxury car tax?
And what about the Expensive Car Supplement? This is an extra cost of £425.00 a year for zero-emission vehicles that cost over £40,000 and are registered after the 1st of April.
Electric vehicle owners were previously exempt from the luxury car tax but anyone buying a new electric car with a list price of over £40,000 will now have to pay it.
The Expensive Car Supplement kicks after the first year, so electric car drivers pay the lower £10.00 rate in year one, followed by £620.00 in years two to six of ownership.
What about vans this year?
Just like electric cars, zero-emission vans are no longer exempt from road tax. As of the 1st of April, e-vans and light commercial EVs will move to the standard tax rate.
For vans, this is £335.00 a year.
Are electric vehicles cheaper than petrol & diesel to run?
Not having to pay car tax was a big incentive for switching to an electric car and made it much cheaper to run an EV than a petrol or diesel car.
However, just because EVs now have to pay road tax, it doesn’t mean EVs are more expensive. When you look at the total cost of ownership – which includes insurance, tolls, charging, servicing and maintenance, it’s still often cheaper (and better for the environment too) to have an electric car.
So, for all Electric vehicle requirements and spare parts, look no further than the team at H Bowers. Call us on 01782 590 700 or email enquiries@bowersautoparts.net.