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Electric car tax: how much will electric car tax be?

In the UK, electric car drivers have enjoyed the benefits of paying £0 road tax whilst driving an electric car as it benefits both the driver as well as the planet. But from the 1st of April 2025, everything is going to change.

Firstly: what is 'road tax' in the UK?

Also referred to as ‘Vehicle Tax Duty (VED)’, road tax is a yearly payment charged on all vehicles being driven or parked on public roads. The government uses this income to contribute to the maintenance and growth of the UK road infrastructure - be this from improving traffic flow to implementing more EV charge points for the public. Most drivers will be familiar with this, as it needs to be renewed every 6-12 months.

Secondly: why is the road tax for electric cars changing?

The decision was made last year by Jeremy Hunt, the Chancellor of the Exchequer, who said:

Because the Office of Budget Responsibility forecasts half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I’ve decided that from then electric vehicles will no longer be exempt from vehicle excise duty.

Thirdly: how much is this going to cost you?

If you're looking for a quick summary of the changes coming from April 2025, here it is:

  • Any EVs registered on or after 1/4/25 will need to pay the lowest first-year rate of VED of £10
  • From the second year, this will change to the standard rate of £180 per year
  • This standard rate will also apply to any zero-emission cars registered between 1/4/17 to 31/3/25
  • The Expensive Car Supplement for EVs will also be scrapped come 2025, impacting models listed above £40,000
  • Zero and low-emission cars (electric and hybrid) registered between 1/3/01 and 30/3/17 in Band A will transition to the Band B rate, which is £20 per year
  • Electric van owners will be required to pay the same rate as petrol or diesel light goods - which is £290 per year
  • Electric motorcycles or bikes will only need to pay for their small engines, which is set at £22 per year

Lastly: with the coming changes, is it still worth getting an EV?

In 2023, we covered this subject in a video you can watch below.

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